Emma Ltd conducted an impairment test at 30 June 2020. As a part of that exercise,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Emma Ltd conducted an impairment test at 30 June 2020. 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 2020 amounted to $240,000. Details are provided below: Equipment 200 000 Accumulated depreciation (40 000) Patent 40 000 Goodwill 6 400 Inventory 33 600 The inventory was measured in accordance with AASB 102 Inventories. For the period ending 30 June 2021, 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 2021, 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, Emma Ltd recognised a reversal of the previous year's impairment loss. Required: Prepare the journal entries to account for the impairment loss at 30 June 2020 and the reversal of the impairment loss at 30 June 2021. And you are required to show all workings for allocation of impairment (and reversal). (10 marks) Emma Ltd conducted an impairment test at 30 June 2020. 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 2020 amounted to $240,000. Details are provided below: Equipment 200 000 Accumulated depreciation (40 000) Patent 40 000 Goodwill 6 400 Inventory 33 600 The inventory was measured in accordance with AASB 102 Inventories. For the period ending 30 June 2021, 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 2021, 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, Emma Ltd recognised a reversal of the previous year's impairment loss. Required: Prepare the journal entries to account for the impairment loss at 30 June 2020 and the reversal of the impairment loss at 30 June 2021. And you are required to show all workings for allocation of impairment (and reversal). (10 marks)
Expert Answer:
Answer rating: 100% (QA)
DATE Working Notes 2 Impaiement Loss is 24000021760... View the full answer
Related Book For
Fundamentals of Cost Accounting
ISBN: 978-1259565403
5th edition
Authors: William Lanen, Shannon Anderson, Michael Maher
Posted Date:
Students also viewed these accounting questions
-
The preparation of financial statements in accordance with AASB standards is one of the most important government regulations imposed on many companies in Australia. According to Australian...
-
Prepare the journal entries to account for the following investment transactions of Samuelson Company: 2011 July 1 Purchased 350 shares of Bateman Company stock at $22 per share plus a brokerage fee...
-
As a part of their customer-service program, United Airlines randomly selected 10 passengers from todays 9 a.m. ChicagoTampa flight. Each sampled passenger is to be inter-viewed in depth regarding...
-
THE iterative software development method. Just read the case thoroughly and answer the below-mentioned 3 questions. Here are the three questions to be answered: 1. What are the two choices Lalonde...
-
Solve the following linear programming model graphically: minimize Z = 3x1 + 6x2 subject to 3x1 + 2x2 18 x1 + x2 5 x1 4 x2 7 x2/x1 7/8 x1, x2 0
-
The scatterplot shows the average life expectancy for some countries and the number of people per TV in those countries. Comment on the appropriateness of the regression. What do you think accounts...
-
Describe the two types (or levels) of independence for a central bank.
-
Refer to the data in the preceding problem for Nantucket Marine Supply. In the preceding problem, Nantucket Marine Supply is a wholesaler for a large variety of boating and fishing equipment. The...
-
A machine can be purchased for $230,000 and used for five years, yielding the following income. This income computation includes annual depreciation expense of $46,000. Income Year 2 Year 3 $106,000...
-
The following transactions occurred in November 202X for J. Kingslys Technical Staffing Agency: The chart of accounts for J. Kingsly Technical Staffing Agency is as follows: Your task is to do the...
-
Problem Description: Given a positive integer array, find all the elements that have been repeated and display them. Example:Input:{1, 3, 2, 7, 5, 1, 3}Output:1, 3
-
Compare the work done in a non-flow and flow type polytropic process.
-
Define thermal efficiency of a heat engine.
-
Are Kelvin-Planck and Clausius statements equivalent?
-
Explain the concept of a closed isobaric process and determine an expansion for its heat transfer.
-
Describe the quick return motion mechanism for a shaper.
-
Problem 1 (splitting string - 15 points): Write a C function that splits a string line separated by commas and stores the values in an array of strings fields. The number of commas is unknown and...
-
The percentage of completion and completed contract methods are described in the FASB ASC. Search the codification to find the paragraphs covering these topics, cite them, and copy the results.
-
Carreras Café is a Spanish restaurant in a college town. The owner expects that the number of meals served in June will be 40 percent below those served in May, because so many students leave...
-
Maple Leaf Production manufactures truck tires. The following information is available for the last operating period. Maple Leaf produced and sold 92,000 tires for $40 each. Budgeted production was...
-
Apple, Inc. is developing a new product (the iWhatever). Managers at Apple are interested in estimating the impact of learning on the cost of producing the iWhatever. They plan to use data from...
-
_________ taxes are designed to take a larger percentage of high incomes as compared to lower incomes. a. Progressive b. Regressive c. Proportional d. Negative
-
Who must legally pay Social Security and Medicare taxes? a. Employers b. Employees c. Both employers and employees d. Neither employers nor employees
-
Expenditures on _________ comprise the largest component of state and local government budgets. a. education b. public safety c. public infrastructure (such as roads and water works) d. public...
Study smarter with the SolutionInn App