Required:

1. What is the post-impairment carrying amount of plant and machinery in (i) above?

2. What is the carrying amount of the goodwill in (ii) following the impairment review?

3. Which set of double entries is required to record the revaluation in (iii)?

4. What will be the depreciation charge on the asset in (iii) for the year ended 31.12.X8?

5. Calculate total impairment loss for the year ended December 31 20X7 related to (i) through (iii).

Question 4 (45 points) Birming is preparing its financial statements for the year ended 31 December 20X7 and has a number of issues to deal with regarding non-current assets. (1) Birming has suffered an impairment loss of S70,000 to one of its cash generating units. The carrying amounts of the assets in the cash-generating unit prior to adjusting for impairment are: S'000 Goodwill 40 Patent 20 Land and buildings 120 Plant and machinery 30 Net current assets 15 The patent is now estimated to have no value. (ii) During the year to 31 December 20X7 Birming acquired Rider for S15 million, its tangible assets being valued at $8 million and goodwill on acquisition being $7 million Assets with a carrying amount of $2 million were subsequently destroyed. Birming has carried out an impairment review and has established that Rider could be sold for $6 million, while its value in use is $6,5 million (iii) A freehold property originally costing $120,000 with a 60-year life has accumulated depreciation to date of $30,000. The asset is to be revalued to $80,000 at 31 December 20x7. Required: 1. What is the post-impairment carrying amount of plant and machinery in (1) above? 2. What is the carrying amount of the goodwill in (ii) following the impairment review? 3. Which set of double entries is required to record the revaluation in (iii)? 4. What will be the depreciation charge on the asset in (iii) for the year ended 31.12.X8? 5. Calculate total impairment loss for the year ended December 31 20X7 related to (i) through (in). Answer for question 4