QUESTION 2 a. Electric Ltd is a wholly owned company of Power Ltd. Power Ltd treats Electric Ltd as a cash generating unit. On 31 March 2020, there was a gas explosion that caused damage to some of Electric Ltd's plant. The assets of Electric Ltd immediately before the accident were: GH '000 Goodwill 3,600 Patent 2,400 Factory building 8,000 Plant 7,000 Receivables 3,000 24,000 As a result of the explosion, the recoverable amount of Electric Ltd is GH¢13.4m. The explosion destroyed (to the point of no further use) an item of plant that had a carrying amount of GHelm Electric Ltd has an open offer from a competitor of GH¢2m for its patent. The receivables are already stated at their fair values less costs to sell. Required: Calculate the carrying amount of the assets at 31 March 2020 after applying any impairment losses.
QUESTION 2 a. Electric Ltd is a wholly owned company of Power Ltd. Power Ltd treats Electric Ltd as a cash generating unit. On 31 March 2020, there was a gas explosion that caused damage to some of Electric Ltd's plant. The assets of Electric Ltd immediately before the accident were: GH '000 Goodwill 3,600 Patent 2,400 Factory building 8,000 Plant 7,000 Receivables 3,000 24,000 As a result of the explosion, the recoverable amount of Electric Ltd is GH¢13.4m. The explosion destroyed (to the point of no further use) an item of plant that had a carrying amount of GHelm Electric Ltd has an open offer from a competitor of GH¢2m for its patent. The receivables are already stated at their fair values less costs to sell. Required: Calculate the carrying amount of the assets at 31 March 2020 after applying any impairment losses.
Chapter1: Financial Statements And Business Decisions
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![QUESTION 2
a. Electric Ltd is a wholly owned company of Power Ltd. Power Ltd treats Electric Ltd as a cash
generating unit. On 31 March 2020, there was a gas explosion that caused damage to some of
Electric Ltd's plant. The assets of Electric Ltd immediately before the accident were:
GH ¹000
Goodwill
3,600
Patent
2,400
Factory building
8,000
Plant
7,000
Receivables
3,000
24,000
As a result of the explosion, the recoverable amount of Electric Ltd is GH¢13.4m. The
explosion destroyed (to the point of no further use) an item of plant that had a carrying amount
of GHelm Electric Ltd has an open offer from a competitor of GH¢2m for its patent. The
receivables are already stated at their fair values less costs to sell.
Required:
Calculate the carrying amount of the assets at 31 March 2020 after applying any impairment
losses.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9e346ca4-e653-4166-bfbc-eabef28d597f%2F7a912ea4-0147-48c3-9d0e-878f15303f13%2Fnvh9cai_processed.jpeg&w=3840&q=75)
Transcribed Image Text:QUESTION 2
a. Electric Ltd is a wholly owned company of Power Ltd. Power Ltd treats Electric Ltd as a cash
generating unit. On 31 March 2020, there was a gas explosion that caused damage to some of
Electric Ltd's plant. The assets of Electric Ltd immediately before the accident were:
GH ¹000
Goodwill
3,600
Patent
2,400
Factory building
8,000
Plant
7,000
Receivables
3,000
24,000
As a result of the explosion, the recoverable amount of Electric Ltd is GH¢13.4m. The
explosion destroyed (to the point of no further use) an item of plant that had a carrying amount
of GHelm Electric Ltd has an open offer from a competitor of GH¢2m for its patent. The
receivables are already stated at their fair values less costs to sell.
Required:
Calculate the carrying amount of the assets at 31 March 2020 after applying any impairment
losses.
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