Zoro Ltd has determined that its China division is a cash-generating unit. The carrying amounts of the assets at 30 June 2014 are as follows:

Factory $210,000

Land $150,000

Equipment $120,000

Machinery $60,000

Zoro Ltd calculated the value in use of the division to be $510,000 and net selling price of $480,000.

Required:

Prepare the appropriate journal entries and explain for the impairment loss, assuming that the fair values less cost to sell of the land is $145,000