Question
Max Ltd is a large manufacturing company based in Revesby in western Sydney. They have a cash generating unit called Production 1. At the 30
Max Ltd is a large manufacturing company based in Revesby in western Sydney. They have a cash generating unit called Production 1. At the 30 June 2020 the management decided to undertake an impairment test. The recoverable amount of Production 1 was $1 245 000.
The carrying amounts of the assets and liabilities as at 30 June 2020 were as follows.
Equipment 1 060 000
Accumulated Depreciation Equipment (360 000)
Land 370 000
Buildings 410 000
Accumulated Depreciation Buildings (120 000)
Goodwill 28 000
Cash 36 000
Inventories 90 000
Receivables 60 000
Provisions 60 000
Bonds 90 000
For the year ended 30 June 2020
a) Calculate the impairment loss (show as a positive number)
$ Answer
b) Assuming the loss calculated in a) above is $50,000 determine the impairment loss to be allocated to Equipment (To nearest $)
$ Answer
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