oronado Landscaping Limited has determined that its lawn maintenance division is a cash-generating unit under IFRS. The carrying amounts of the division’s assets at December 31, 2020, are as follows: Land $26,000 Building 58,000 Equipment 34,000 Vehicles 16,000 $134,000 The lawn maintenance division has been assessed for impairment and it is determined that the division’s value in use is $120,600, fair value less costs to sell is $89,000, and undiscounted future net cash flows are $158,000. Assume that Coronado prepares financial statements under ASPE instead, and that the lawn maintenance division is an asset group. Determine if the asset group is impaired and prepare the journal entry, if any, to record the impairment at December 31, 2020, assuming that none of the individual assets in the division has a determinable recoverable amount.
oronado Landscaping Limited has determined that its lawn maintenance division is a cash-generating unit under IFRS. The carrying amounts of the division’s assets at December 31, 2020, are as follows: Land $26,000 Building 58,000 Equipment 34,000 Vehicles 16,000 $134,000 The lawn maintenance division has been assessed for impairment and it is determined that the division’s value in use is $120,600, fair value less costs to sell is $89,000, and undiscounted future net cash flows are $158,000. Assume that Coronado prepares financial statements under ASPE instead, and that the lawn maintenance division is an asset group. Determine if the asset group is impaired and prepare the journal entry, if any, to record the impairment at December 31, 2020, assuming that none of the individual assets in the division has a determinable recoverable amount.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 15E: The following are independent errors: a. In January 2019, repair costs of 9,000 were debited to the...
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Coronado Landscaping Limited has determined that its lawn maintenance division is a cash-generating unit under IFRS. The carrying amounts of the division’s assets at December 31, 2020, are as follows:
| Land | $26,000 | |
| Building | 58,000 | |
| Equipment | 34,000 | |
| Vehicles | 16,000 | |
| $134,000 |
The lawn maintenance division has been assessed for impairment and it is determined that the division’s value in use is $120,600, fair value less costs to sell is $89,000, and undiscounted future net cash flows are $158,000.
Assume that Coronado prepares financial statements under ASPE instead, and that the lawn maintenance division is an asset group. Determine if the asset group is impaired and prepare the
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Transcribed Image Text:Assume that Coronado prepares financial statements under ASPE instead, and that the lawn maintenance division is an
asset group. Determine if the asset group is impaired and prepare the journal entry, if any, to record the impairment
at December 31, 2020, assuming that none of the individual assets in the division has a determinable recoverable
amount. (Credit account titles are automatically indented when the amount is entered. Do not indent
manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Date
Account Titles and Explanation
Debit
Credit
December 31, 2020
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