QUESTION 1 [26] Kar Jenkins has just been appointed the managing director of Car Cables Limited, a Manufacturer of motor vehicle cables and belts. Kar has extensive experience in this industry and has been appointed to help turn the company around however he has limited financial experience. The auditors have requested him to review the assets and perform impairment testing where there are indicators of impairment. Kar has come to you; the accountant requesting help and requested the following information from you. a) What are indicators of impairment and what information should I consider when reviewing this? (4) b) The auditors spoke about recoverable amount - what is this and do I need to calculate this? (4) c) I have tried searching on Google about impairment and saw some information on fair value and value in use - What are these? (4) d) Google also speaks about impairment losses - What is an impairment loss? (2) e) I do have concerns over one of the assets on the floor - it is not functioning as it should so I am not sure whether this would be an impairment - please let me know whether it is and if yes, what journal entry will be required to be processed in this regard. (10) Fan Belt machine Carrying amount 31 December 2020 Value in use Expected selling price Cost of delivery to potential customer Legal costs involved in the sale R5 300 000 R4 146 124 R5 220 000 R27 500 R22 000