Gift Ltd has two cash generating units: Blue and Box. A comparison of these CGUs and their
Fantastic news! We've Found the answer you've been seeking!
Question:
Gift Ltd has two cash generating units: Blue and Box. A comparison of these CGUs and their recoverable amounts are shown below:
CGU - Blue | CGU - Box | |
Property, plant and equipment | $1,000,000 | $900,000 |
Goodwill | 300,000 | 200,000 |
Accumulated impairment - goodwill | (100,000) | (50,000) |
Carrying amount | 1,200,000 | 1,050,000 |
Recoverable amount | 1,100,000 | 880,000 |
Impairment loss | 100,000 | 170,000 |
Required:
a) Prepare the general journal entries to write down the goodwill for Blue and Box. Assume Gift Ltd provides the following breakdown of PPE for Box:
Buildings $360,000
Equipment $225,000
Land $180,000
Fittings $135,000
Total: $900,000
Related Book For
Accounting Tools for Business Decision Making
ISBN: 978-1118096895
6th edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
Posted Date: