Conditions of impairment have been identified. The company has established that thereare two CGU's: the merchandising division and the construction division. The assets ofthe merchandising division include Building 1 and Equipment 1 and 3. The assets of theconstruction division include Building 2 and the remaining equipment. Information oneach of these assets is provided below:Carrying Value at Dec 31, 20x5$4,700,0003,236,752433,500223,125595,000306,000585,706555,000AssetResidual ValueBuilding 1Building 2Equipment 1Equipment 3Equipment 4Equipment 5Equipment 6Equipment 7$500,000200,000100,00040,000100,00030,000The following additional data has been provided.MerchandisingConstructionDivisionDivisionFair value of assetsEstimated costs to sell5,200,000500,000$5,000,000450,000Future cash flow budget$500,000500,000500,000500,000400,000$250,000350,000450,000500,000600,00020х620х720x820x9Beg of 20x10 – end of 20x24 The relevant discount rate is 6%.Required – For each of the two CGUS, prepare the impairment journal entry (if any) atDecember 31, 20x5. Assume the company follows IFRS.

Impairment is the reduction in fair value of assets in market below the carrying value of assets in…

Answered: Required – For each of the two CGUS,…

Required – For each of the two CGUS, prepare the impairment journal entry (if any) at December 31, 20x5. Assume the company follows IFRS.

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter9: Metric-analysis Of Financial Statements

Section: Chapter Questions

Problem 9.16E

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During the current accounting period, Jack Ltd considered the recognition of the following costs as intangible assets. GHS 40,000 spent on evaluating research findings GHS 60,000 spent on acquiring a brand name from a competitor GHS 50,000 spent on acquiring the legal rights to a production process, without which Jack Ltd’s business cannot function In accordance with IAS 38 Intangible Assets, what is the maximum amount that Jack Ltd could recognize as intangible assets?
The information below was extracted from the books of Let Your Light Shine Enterprise: Non-current Asset Cost (GH¢) Date of Acquisition Date of Disposal Proceed from Disposal (GH¢) Machine A 30,000 03/01/15 31/08/17 18,000 Machine B 40,000 01/07/15 - - Machine C 60,000 30/09/15 01/07/17 50,000 Machine D 80,000 01/04/16 - - Additional information: a) As per the enterprise’s accounting policy, depreciation charged is pro-rated on the basis of months of use. All acquisitions and disposals are on cash basis; b) Machines A and B are depreciated at a rate of 20% on reducing balance basis while Machines C and D at 10% on straight line basis; and c) Accounts are prepared to 31st December every year. You are required to: I. Show the relevant accounts for machinery for years to 31st December, 2017; II. Show the Income statement and the statement of financial position for each of the…
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