| | Exercise 11-21 Pearl Landscaping Limited has determined that its lawn maintenance division is a cash-generating unit under IFRS. The carrying amounts of the divisions assets at December 31, 2020, are as follows: | Land | | $36,000 | | Building | | 68,000 | | Equipment | | 43,000 | | Vehicles | | 25,000 | | | | $172,000 | The lawn maintenance division has been assessed for impairment and it is determined that the divisions value in use is $154,800, fair value less costs to sell is $127,000, and undiscounted future net cash flows are $196,000. | | | | | | Determine if the cash-generating unit is impaired and prepare the journal entry, if any, to record the impairment at December 31, 2020, assuming that none of the individual assets in the division has a determinable recoverable amount. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Do not round intermediate calculations. Round final answers to 0 decimal places, e.g. 5,275.) | Date | Account Titles and Explanation | Debit | Credit | | December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Prepare the journal entry, if any, to record the impairment at December 31, 2020, assuming that the divisions only individual asset that has a determinable recoverable amount is the building, which has a fair value less costs to sell of $64,000. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Do not round intermediate calculations. Round final answers to 0 decimal places, e.g. 5,275.) | Date | Account Titles and Explanation | Debit | Credit | | December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Assume that Pearl prepares financial statements under ASPE instead, and that the lawn maintenance division is an asset group. Determine if the asset group is impaired and prepare the journal entry, if any, to record the impairment at December 31, 2020, assuming that none of the individual assets in the division has a determinable recoverable amount. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) | Date | Account Titles and Explanation | Debit | Credit | | December 31, 2020 | | | | | | | | | | | | | | | Question Attempts: 0 of 4 used | | SAVE FOR LATER | SUBMIT ANSWER | | | | |
