Balloon Ltd (Balloon) purchased an item of equipment on 1 July 2015 for $2 million. At that time che useful life of the equipment was assessed to be 10 years, with no residual value. Balloon applies the cost model to its equipment. On 30 June 2020 the recoverable amount of the equipment was assessed to be $900,000. Accordingly, an impairment loss of $100,000 was recognised. The useful life of the equipment remained at five years. On 30 June 2023 (three years later) the same equipment's carrying amount is $360,000 and its recoverable amount is $450,000.

Balloon Ltd (Balloon) purchased an item of equipment on 1 July 2015 for $2 million. At that time che useful life of the equipment was assessed to be 10 years, with no residual value. Balloon applies the cost model to its equipment. On 30 June 2020 the recoverable amount of the equipment was assessed to be $900,000. Accordingly, an impairment loss of $100,000 was recognised. The useful life of the equipment remained at five years. On 30 June 2023 (three years later) the same equipment's carrying amount is $360,000 and its recoverable amount is $450,000.

Name: Balloon Ltd (Balloon) purchased an item of equipment on 1 July 2015 f
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Description: Balloon Ltd (Balloon) purchased an item of equipment on 1 July 2015 for $2 million. At that timethe useful life of the equipment was assessed to be 10 years, with no residual value. Balloonapplies the cost model to its equipment.On 30 June 2020 the

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 31P

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