JB Ltd has several items of office equipment.

The following table shows the relevant information for the assets as at 30 June 2023.

Equipment Carrying amount Value in use Fair value Cost of disposal

$ $ $ $

1 248,000 236,000 252,000 2,000

2 150,000 145,000 140,000 4,000

3 540,000 525,000 536,000 6,000

Depreciation for the year ended 30 June 2023 has been accounted for in the figures provided above. All equipment has been depreciated over 10 years on a straight-line basis, with no residual value.

Required:

Determine whether any impairment losses occurred for each of the above items of equipment.

Note: Round all figures to the nearest dollar.

Note: you are not required to provide any journal entries.

Part B

Katie runs Happy Beans, a caf located in regional NSW. Happy Beans is located within the compound of Hartley Historic Site, a heritage site on the western edge of the Blue Mountains near Lithgow. The heritage site offers a gallery and tours of the historic site that attract customers to the caf. During the financial year ended 30 June 2023, Katies close friend, a famous artist, gifted an art piece with a market value of $100,000 to Katie. Katie loves the work and has decided to hang the gift int her caf.

Required:

Explain whether Happy Beans will recognize the following as an asset, in accordance with the conceptual framework definition and recognition criteria: The gallery and heritage value within which the caf is located.

The donated art piece.