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the land held by the Dragon Unit had a fair value less costs of disposal of $404,600. Required Prepare the journal entries required at 30
the land held by the Dragon Unit had a fair value less costs of disposal of $404,600. Required Prepare the journal entries required at 30 June 2019 to account for any impairment losses. (Round your final answers to the nearest whole number. Enter debit entries first, followed by credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Exercise 7.20 A large manufacturing company, St. George Ltd, has its operations in Newcastle. It has two cash-generating units, Red Unit and Dragon Unit. At 30 June 2019, the management of the company decided to conduct impairment testing. It calculated that the recoverable amounts of the two divisions were $1,243,900 (Red Unit) and $930,300 (Dragon Unit). In considering the assets of the cash-generating units the company allocated the assets of the corporate area equally to the units. The carrying amounts of the assets and liabilities of the two cash-generating units and the corporate assets at 30 June 2019 were as follows: Dragon Unit Corporate Red Unit $ 960,100 Equipment Accumulated depreciation (Equipment) (360,500) $ 449,800 Land 269,900 $ 630,400 Buildings 330,200 419,800 (120,100) (180,400) (150,400) Accumulated depreciation (Buildings) Furniture and fittings 90,100 Accumulated depreciation (Furniture and fittings) (30,100) Goodwill 42,000 Cash 36.300 24,100 Inventories 90,000 119,800 Receivables 60,400 23,800 1,266,300 59,600 916,900 522,000 Total assets Provisions 120,200 Debentures 89,600 197,500 317,700 599,200 Total liabilities 149, 200 $1,117,100 Net assets In relation to these . the receivables of both units were considered to be collectable Prepare the journal entries required at 30 June 2019 to account for any impairment los followed by credit entries. Credit account titles are automatically indented when und yo earest whole number. Enter debit entries first, the a nt is antera Account and explanation Debit Credit 42000 impairment losses Goodwill 42000 (Recognition of impairment loss for corporate goodwill) Accumulated depreciation and impairment losse 19863 Accumulated depreciation and impairment I 19863 (Recognition of impairment loss for corporate building) Impairment loss 61933 Land 15483 Accumulated depreciation and impairment lo 12053 Accumulated depreciation and impairment lo 34397 (Recognition of impairment loss for Red Unit) Impairment loss 52804 Land 45200 Accumulated depreciation and impairment lo 6080 Accumulated depreciation and impairment lo 1524 (Recognition of impairment loss for Dragon Unit) xStep by Step Solution
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