Question
Entity A has a cash-generating unit (CGU) that suffers a large drop in income due to reduced demand for its products. An impairment review was
Entity A has a cash-generating unit (CGU) that suffers a large drop in income due to reduced demand for its products. An impairment review was carried out and the recoverable amount of the CGU was determined at $105,050. On 31 December 2022, the assets of the CGU had the following carrying amounts immediately prior to the impairment:
$ | |
Goodwill | 15,000 |
Intangible assets | 45,600 |
Plant | 68,400 |
Inventory | 23,900 |
Receivable | 24,000 |
176,900 |
The inventory and receivable are considered to be included in their recoverable amounts.
REQUIRED:
According to the relevant accounting standards, provide the journal entries for impairment loss recognition on 31 December 2022.
ACCOUNTS FOR INPUT:
| Road roller | Plant | Machine | Motor van | Land | Building | Inventory | Intangible assets | Bank |
| Payable | Receivable | Retained earnings | Other income | Other expense | Interest expense | Interest revenue |
| Depreciation | Accum. depreciation | Impairment loss | Reversal of impairment loss | Loss on disposal | Gain on disposal |
| Restoration liability | Goodwill | Revaluation surplus | Revaluation deficit | No entry |
ANSWERS:
Journal Entries:
For entering more than one asset on the Debit or Credit side, the sequence is as same as the sequence listed in the question.
Date | Account Name | Debit ($) | Credit ($) | Hints For Sequence |
31-Dec-20 | - | |||
- | ||||
- | ||||
- | ||||
- | ||||
- |
Please fill the whole journal entries with names above. Thank you!
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