Saxon Ltd conducted an impairment test at 30 June 2015. As a part of that exercise, it measured the recoverable amount of the entity, considered to be a single cash-generating unit, to be $217 600. The carrying amounts of the assets of the entity at 30 June 2015 were:

Equipment Accumulated depreciation Patent Goodwill Inventory Receivables

200000 (40000) 40 000 6 400 32 000 1 600

The receivables held by Saxon Ltd were all considered to be collectable. The inventory was measured in accordance with AASB 102 Inventories.

For the period ending 30 June 2016, the depreciation charge on equipment was $14 720. If the equipment had not been impaired the charge would have been $20 000.

At 30 June 2016, the recoverable amount of the entity was calculated to be $10 400 greater than the carrying amount of the assets of the entity. As a result, Saxon Ltd recognised a reversal of the previous years impairment loss.

Required

Prepare the journal entry(ies) accounting for the impairment loss at 30 June 2015 and the reversal of the impairment loss at 30 June 2016.