Question 1 Express Delivery Ltd in 2010 started its delivery business in Sydney delivering parcels to Western Sydney region. On 1 July 2015, Express Delivery Ltd acquired drones for use in its delivery services business. Express Delivery Ltd has provided you with the following information relating to its acquisition of the airplane: Cost at acquisition date: 1 July 2015 Estimated useful life: $360,000 10 years $60,000 Expected residual value : Depreciation method: straight-line basis over its useful life Carrying amount: 30 June 2017 Straight-line $300,000 At the end of the 2017 reporting period the annual review of all drones found that this particular item of drones had incurred significant damage because of harsh weather condition in Western Sydney. Express Delivery Ltd used an external firm of Actuaries to provide the fair values of itsdrones. The actuaries as a result of the damage, estimated the fair value less costs of disposal of the drones at the end of the reporting period as follows: Annual review end of the 2017, fair value less costs of disposal Expected annual net cash flows next 8 years Expected residual value $180,000 $31,050 Unchanged The management of Express Delivery Ltd and the actuaries uses a discount rate of 9 per cent for calculations of this kind. REQUIRED: 1. Determine whether Express Delivery Ltd has incurred an impairment loss in relation to the asset. If so, determine the amount of the impairment loss, and provide the journal entry necessary to recognise any impairment in the airplane. (7 marks)