Impairment of Assets

Woobles Ltd has determined that its manufacturing division is a cash-generating unit. The carrying amounts of the net assets for this division as at 30 June 2022 are as follows:

Cash	$ 24,000
Accounts Receivable (net)	82,000
Inventory	97,000
Loan Receivable	50,000
Equipment	300,000
Accumulated Depn Equipment	(40,000)
Factory	480,000
Accumulated Depn Factory	(48,000)
Land	300,000
Goodwill	90,000
Total	1,335,000
Accounts Payable	96,000
Net Assets	1,239,000

The land has an individual fair value less costs of disposal of $230,000 as at 30 June 2022.

It was determined on 30 June 2022 that the CGUs fair value less costs of disposal was $1,060,000, and its value in use was $1,020,000.

Required:

a) Provide the appropriate journal entry for Woobles Ltd in relation to the impairment testing on 30 June 2022. Show calculations and workings. Round % figures to nearest whole percent in performing calculations. References to AASB 136 are not required.

At 30 June 2023, Woobles Ltd, because of a reversal of the indicators leading to the impairment, assessed the recoverable amount of the cash-generating unit to be $140,000 more than the carrying amount of the unit. As a result, Woobles Ltd recognised a reversal of the impairment loss. Up until 30 June 2022, (i.e. prior to impairment), depreciation was charged on the Equipment at $20,000 p.a. and on the Factory at $24,000 p.a. After impairment, the new depreciation was revised to $25,000 p.a. for the Equipment and $20,000 p.a. for the Factory. The land has an individual recoverable amount of $260,000 as at 30 June 2023.

Required:

b) Provide the appropriate journal entry for Woobles Ltd in relation to the impairment reversal on 30 June 2023. Show calculations and workings. Round % figures to nearest whole percent in performing calculations. References to AASB 136 are not required.