Impairment of a CGU (Cash Generating Unit) Potters Ltd has determined that its fine China division is a CGU. The carrying amounts of the assets at 30 June 2021 are as follows: Factory $220,000 Land 150,000 Equipment 120,000 Inventories 60,000 Potters Ltd calculated the value in use of the division to be $510 000. POTTERS LTD If recoverable amount is $510 000, then there is an impairment loss of $40 000 (i.e., $550,000 – 510,000) Required: Provide the necessary journal entries for the impairment loss.
Impairment of a CGU (Cash Generating Unit) Potters Ltd has determined that its fine China division is a CGU. The carrying amounts of the assets at 30 June 2021 are as follows: Factory $220,000 Land 150,000 Equipment 120,000 Inventories 60,000 Potters Ltd calculated the value in use of the division to be $510 000. POTTERS LTD If recoverable amount is $510 000, then there is an impairment loss of $40 000 (i.e., $550,000 – 510,000) Required: Provide the necessary journal entries for the impairment loss.
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter10: Long-lived Tangible And Intangible Assets
Section: Chapter Questions
Problem 25E
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Impairment of a CGU (Cash Generating Unit)
Potters Ltd has determined that its fine China division is a CGU. The carrying amounts of the assets at 30 June 2021 are as follows:
Factory |
$220,000 |
Land |
150,000 |
Equipment |
120,000 |
Inventories |
60,000 |
Potters Ltd calculated the value in use of the division to be $510 000.
POTTERS LTD
If recoverable amount is $510 000, then there is an impairment loss of $40 000 (i.e., $550,000 – 510,000)
Required:
Provide the necessary
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