The GLOBAL MECHANICAL Company runs sporting events such as Shooting tournaments and

downhill skiing events in various countries. The company has been successful in the past in running

events that attract a significant number of customers, and in the last years GLOBAL MECHANICAL

has always made a profit. There have decided to expand their operations and want to buy an

Airplane for use in their logistics rather than paying high fares to Chartered Flights:

Cost of the Plane will be $ with a useful life of years on Jan There were some

additional costs that were incurred for making the plane ready to use ie Import duties of $

Legal costs of $ Transportation Costs of $ training costs of $ and modification

cost of $ At the end of the year BOD of the company has decided to move

towards revaluation model of accounting rather than following cost model. Market value of the

plane was $ on

a Show the all the necessary Journal Entries at the start of the year and end of each year until

b From the Abovementioned scenario of GLOBAL MECHANICAL Company, The company has faced a

major problem in the plane its recoverable value @ Jun became $ Considering

constant depreciation as mentioned of the abovementioned period calculate its impairment loss?

What is Impairment? Show the Journal Entries as at June

Answer rating: 100% (QA)

a Journal Entries 1st January 2010 Airplane Asset 1200000 Import Duties Payable 50000 Legal Costs Pa... View the full answer