ABC Ltd conducted an impairment test of one of its cash generating units (CGU) at 30June 20X0. The test determined that the recoverable amount of the entire CGU was$80,000. The carrying amounts of the assets of the entity at 30 June 20X0 were:Equipment (net of depreciation)ReceivablesGoodwill$63,00015,00022,000RequiredPrepare the journal entry to account for the impairment of goodwill at 30 June 20X0.

The objective of the question is to prepare the journal entry to account for the impairment of…

Answered: ABC Ltd conducted an impairment test of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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SE9-11 Sale of Equipment Prepare the journal entry for the following transactions (1) Geysler Company sold some old equipment that initially cost $30, 000 and had $25,000 of accumulated depreciation and received cash in the amount of $3,000. (2) Assume the facts except Geysler received $9,000.
Tamarisk Inc. owns equipment that cost $ 638,000 and has accumulated depreciation of $ 165,000. The expected future net cash flows from the use of the asset are expected to be $ 422,000. The fair value of the equipment is $ 365,000. Prepare the journal entry, if any, to record the impairment loss. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit
Jurassic Company owns machinery that cost $900,000 and has accumulated depreciation of $380,000. The present value of expected future net cash flows from the use of the asset are expected to be $500,000. The fair value less cost of disposal of the equipment is $400,000. Prepare the journal entry, if any, to record the impairment loss.
Equipment was acquired at the beginning of the year at a cost of $625,000. The equipment was depreciated using the straight-line method based on an estimated useful life of 9 years and an estimated residual value of $46,635. a. What was the depreciation for the first year? Round your answer to the nearest cent.$ b. Using the rounded amount from Part a in your computation, determine the gain(loss) on the sale of the equipment, assuming it was sold at the end of year eight for $105,608. Round your answer to the nearest cent and enter as a positive amount.$ Loss c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Round your answers to the nearest cent
Sage Hill Inc. owns equipment that cost $594,000 and has accumulated depreciation of $154,000. The expected future net cash flows from the use of the asset are expected to be $392,000. The fair value of the equipment is $339,000. Prepare the journal entry, if any, to record the impairment loss. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit
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What should be the carrying value of goodwill for reporting unit A at year - end? What should be the carrying value of goodwill for reporting unit D at year-end ? What impairment loss should reporting unit B report for the year?\table [[Reporting Unit, A, B, C, D Reporting Unit Carrying Value of reporting unit Goodwill included in carrying value Fair Value of net identifiable assets at year-end Fair Value of reporting unit at year-end G A $600,000 $60,000 $600,000 $590,000 B C $330,000 $520,000 $48,000 $40,000 $300,000 $500,000 $305,000 $585,000 D $380,000 $28,000 $375,000 $400,000
Cullumber Corporation owns equipment with a cost of $294900 and accumulated depreciation at December 31 of $152200. It is estimated that the machinery will generate future cash flows of $166600. The machinery has a fair value of $115200. Cullumber should recognize a loss on impairment of O $23900. O $0. O $14400 O $37000.
Computing Impairment of Intangible Assets Stiller Company had the following information for its three intangible assets. 1. Patent: A patent was purchased for $140,000 on June 30 of Year 1; Stiller estimated the useful life of the patent to be 15 years. On December 31 of Year 3, the estimated future cash flows attributed to the pat were $119,000. The fair value of the patent was $105,000. 2. Trademark: A trademark was purchased for $7,000 on August 31 of Year 2. The trademark is considered to have an indefinite life. The fair value of the trademark on December 31 of Year 3 is $3,500. 3. Goodwill: Stiller recorded goodwill in January of Year 2, related to a purchase of another company. The carrying value of goodwill is $42,000 on December 31 of Year 3. On December 31 of Year 3, the segment for which the goodwill relates had a fair value of $812,000. The book value of the net assets of the segment (including goodwill) is $840,000. a. Classify each of the intangible assets above as a…
Required: Complete the following table to determine the carrying amounts at 12/31/Y5 for the assets of the Rocker Division. Goodwill Property, Plant, and Equipment Other Intangibles Total Carrying amount, 12/31/Y4 $1,000 $1,500 $500 $3,000 Amortization expense, Year 5 (125) (100) (225) Subtotal $1,000 $1,375 $400 $2,775 Impairment loss/recovery Carrying amount, 12/31/Y5 Part 2. Due to favorable changes in export laws, management revises its estimate of the value in use for the Rocker Division at 12/31/Y6 to be $1,930. Required: Complete the following table to determine the carrying amounts at 12/31/Y6 for the assets of the Rocker Division. Goodwill Property, Plant, and Equipment Other Intangibles Total Carrying amount, 12/31/Y5 Amortization expense, Year 6 Subtotal Impairment loss/recovery Carrying amount, 12/31/Y6
Shamrock Inc. owns equipment that cost $605,000 and has accumulated depreciation of $157,000. The expected future net cash flows from the use of the asset are expected to be $400,000. The fair value of the equipment is $346,000. Prepare the journal entry, if any, to record the impairment loss. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit

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