RAAD Limited operates a Yacht in the Volta Lake for tourists. The draft account at January 1,

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Question:

RAAD Limited operates a Yacht in the Volta Lake for tourists. The draft account at January 1, 2013 includes the following:
Original cost of Yacht at January 1, 2010 GH¢ 72,000
Depreciation: Accumulated balance GH¢(27,000)
Revaluation surplus on 1st January, 2013 GH¢ 39,000
GH¢84,000

The Yacht was originally being written off over eight years, but the revaluation has extended its life span by one more year. However, the tourist has slumped during 2013, and as a result will only be able to generate:
Cash GH¢
2013 18,000
2014 17,500
2015 16,500
2016 15,000
2017 14,000
2018 13,000

Scrapped value of GH¢9,500 payable in 2018

Decommissioning cost of GH¢12,000 payable as follows:

20% payable in 2015

30% payable in 2016

40% payable in 2017

10% payable in 2018

Alternatively, the Yacht could be sold immediately for GH¢51,400 less GH¢900 selling cost. Market interest rates are 22% per annum.

Required
(a) Calculate the impairment loss at 31st December, 2013
(b) Redraft the Yacht note for 2013 to reflect the impairment loss
(c) Draft the Yacht note for 2014
(d) In December 2014 the market value for the Yacht picked up, and the Yacht now has a receivable amount of GH¢36,000. You are required to redraft 2014’s Yacht note to reflect this.
(e) Prepare the income statement account and the revaluation account for 2013 and 2014 as per the requirement of IAS 36.