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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 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
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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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.

 

 

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