Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

QUESTION 2 QUESTION 2 Pramso Lid has a product line producing processed cocoa beans for export. The carrying amount of the net assets employed on

image text in transcribed

QUESTION 2

QUESTION 2 Pramso Lid has a product line producing processed cocoa beans for export. The carrying amount of the net assets employed on the line as at 31 December 2012 was GHC572,000. There is an indication that the export market would be adversely affected in 2015 by competition from producers of synthetic cocoa. The Finance Director estimates the net realizable value of the net assets as at 31/12/2012 to be only GHC350,000. The board of directors has approved a budget for the years ended 31/12/2013, 31/12/2014 and 31/12/2015. The assumptions underlying the budgets are: Unit costs and revenue GHC Selling price Buy in cost (20) Production cost: Materials, Labour & Overhead (3.75) Head office Overhead apportioned (1.25) Cash inflow per unit 50 25.00 2012 2013 2014 2015 Estimated sales volume at 31/12/2012 8000 11000 4000 The rate obtained elsewhere for companies in the same industry with similar size and risk profile (equivalent to discount factor) is 10% per annum. Required: Calculate the impairment loss if any for 31/12/2012

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting For Executives And MBAs

Authors: Wallace, Simko, Ferris

4th Edition

1618531980, 9781618531988

More Books

Students also viewed these Accounting questions