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At 30 June 2021, Sanji Ltd reported the following cash-generating unit: Land Building Accumulated Depreciation Goodwill 400,000 650,000 (150,000) 40,000 All items of property, plant and equipment are measured using the cost model. At 30 June 2021, the recoverable amount of the cash-generating unit was $891 000. For the period ending 30 June 2022, the depreciation charge on building was $47 000. If the building had not been impaired the charge would have been $50 000. At 30 June 2022, the recoverable amount of the unit was calculated to be $5 500 greater than the carrying amount of the assets of the unit. As a result, Sanji Ltd recognized a reversal of the previous year's impairment loss. Required: Prepare the journal entries relating to impairment at 30 June 2021 and 30 June 2022. Note: You are required to show all workings and round up to the nearest dollar. Narrations are not required.

At 30 June 2021, Sanji Ltd reported the following cash-generating unit: Land Building Accumulated Depreciation Goodwill 400,000 650,000 (150,000) 40,000 All items of property, plant and equipment are measured using the cost model. At 30 June 2021, the recoverable amount of the cash-generating unit was $891 000. For the period ending 30 June 2022, the depreciation charge on building was $47 000. If the building had not been impaired the charge would have been $50 000. At 30 June 2022, the recoverable amount of the unit was calculated to be $5 500 greater than the carrying amount of the assets of the unit. As a result, Sanji Ltd recognized a reversal of the previous year's impairment loss. Required: Prepare the journal entries relating to impairment at 30 June 2021 and 30 June 2022. Note: You are required to show all workings and round up to the nearest dollar. Narrations are not required.

FINANCIAL ACCOUNTING
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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At 30 June 2021, Sanji Ltd reported the following cash-generating unit: Land Building Accumulated Depreciation Goodwill 400,000 650,000 (150,000) 40,000 All items of property, plant and equipment are measured using the cost model. At 30 June 2021, the recoverable amount of the cash-generating unit was $891 000. For the period ending 30 June 2022, the depreciation charge on building was $47 000. If the building had not been impaired the charge would have been $50 000. At 30 June 2022, the recoverable amount of the unit was calculated to be $5 500 greater than the carrying amount of the assets of the unit. As a result, Sanji Ltd recognized a reversal of the previous year's impairment loss. Required: Prepare the journal entries relating to impairment at 30 June 2021 and 30 June 2022. Note: You are required to show all workings and round up to the nearest dollar. Narrations are not required.
Transcribed Image Text:At 30 June 2021, Sanji Ltd reported the following cash-generating unit: Land Building Accumulated Depreciation Goodwill 400,000 650,000 (150,000) 40,000 All items of property, plant and equipment are measured using the cost model. At 30 June 2021, the recoverable amount of the cash-generating unit was $891 000. For the period ending 30 June 2022, the depreciation charge on building was $47 000. If the building had not been impaired the charge would have been $50 000. At 30 June 2022, the recoverable amount of the unit was calculated to be $5 500 greater than the carrying amount of the assets of the unit. As a result, Sanji Ltd recognized a reversal of the previous year's impairment loss. Required: Prepare the journal entries relating to impairment at 30 June 2021 and 30 June 2022. Note: You are required to show all workings and round up to the nearest dollar. Narrations are not required.
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