cash generating unit

Part 2 (i) Granger Ltd acquired an item of equipment at a cost of K800, 000 on 1 April 2013 that is used to produce and package pharmaceutical pills. The plant had an estimated residual value of K50, 000 and an estimated life of five years, neither of which has changed. Granger uses straight-line depreciation. On 31 March 2015, Granger Ltd was informed by a major customer (who buys products produced by the plant) that it would no longer be placing orders with Granger. Even before this information was known, Granger had been having difficulty finding work for this plant. It now estimates that net cash inflows earned from the plant for the next three years will be: K' 000 Year ended: 31 March 2016 220 31 March 2017 180 31 March 2018 170 On 31 March 2018, the plant is still expected to be sold for its estimated realisable value. Granger has confirmed that there is no market in which to sell the plant at 31 March 2015. Granger's cost of capital is 10%. (ii) Granger owned a 100% subsidiary, Matilda that is treated as a cash generating unit. On 31 March 2018, there was a gas explosion that caused damage to some of Matilda's plant. The assets of Matilda immediately before the accident were: K' 000 Goodwill 1,800 Patent 1,200 Factory building 4,000 Plant 3,500 Receivables and cash 1,500 12.000 As a result of the explosion, the recoverable amount of Matilda is K6.7 million The explosion completely destroyed an item of plant that had a carrying amount of K500, 000. Matilda has an open offer from a competitor of K1 million for its patent. The receivables and cash are already stated at their net realisable values. Required: Calculate the carrying amounts of the assets in (i) and (ii) above at 31 March 2018 after applying any impairment losses. (10 marks)