QUESTION 1

Apple Ltd reported the following assets in its statement of financial position at 30 June 2021:

Land	50,000
Patent	200,000
Plant	500,000
Accumulated Depreciation	(150,000)
Goodwill	50,000
Inventory	100,000
Accounts receivables	30,000
Cash	5,000
	785,000

The recoverable amount of the entity was calculated to be $714,000.

All assets are measured using the cost method. Inventory is measured at the lower of cost and net realisable value in accordance with AASB102 Inventories. The receivables were all considered to be collectable.

Required:

1. Allocate the impairment loss to assets in the CGU as per AASB136 (Please round off to the nearest dollar). (5 Marks)

2. Prepare journal entries to record the allocation of the impairment loss at 30 June 2021. Descriptions/Narrations are NOT required. (5 marks)

Asset	Carrying Amount	Proportion	Allocation of Loss	Adjusted Carrying Amount

DATE	DESCRIPTION	DR	CR

QUESTION 2

Terry Ltd (Lessor) and Shane Ltd (Lessee) enter into a lease agreement for a vehicle on 30 June 2020.

Details of the lease agreement are as follows:

Lease term	3 years
Annual Rental Payment in advance starting from 30 June 2020	$46,000
Estimated Residual value at the end of the lease term	$10,000
Residual Value guaranteed by the lessee	$5,000
Interest Rate implicit in the lease	7%

The annual rental payment includes $1,000 that is reimbursed to the lessor to do the maintenance and insurance for the vehicle on behalf the lessee. The lessee intends to return the vehicle to the lessor at the end of the lease term.

The lease payment schedule for the lessee is shown below:

Date	Lease Payment	Interest Expense	Liability Reduction	Liability Balance
30-Jun-20				130,442
30-Jun-20	45,000	-	45,000	85,442
30-Jun-21	45,000	5,981	39,019	46,423
30-Jun-22	45,000	3,250	41,750	4,673
30-Jun-23	5,000	327	4,673	0

Required:

Based on the above lease payments schedule, prepare the necessary journal entries in the books of the lessee on the following dates:

1. 30 June 2020

2. 30 June 2021

3. 30 June 2023

Narrations are NOT needed. (10 Marks)

DATE	DESCRIPTION	DR	CR