Riverbed Corp., a mining company, owns a significant mineral deposit in a northern territory. Riverbed prepares financial statements in accordance with IFRS. Included in the asset is a road system that was constructed to give company personnel access to the mineral deposit for maintenance and mining activity. The road system cannot be sold separately and separate cash flow information is not available for it. The carrying amounts of two cash-generating units of the mine at June 30, 2023, are as follows: Machinery Mine in the development phase The machinery's value in use has been assessed at $4,800,000 while the fair value less costs to sell is $4,100,000. With respect to the mine, the value in use is $8,200,000 while fair value less costs to sell is $8.590,000. Date $4,300,000 (b) Determine if the machinery and the mine are impaired and prepare the journal entries, if any, to record the impairment at June 30. 2023. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts List all debit entries before credit entries.) June 30, 2023 $8,740.000 June 30, 2023 Account Titles and Explanation Loss on Impairment Accumulated Impairment Losses - Machinery (To record the impairment of machinery) Loss on Impairment Accumulated Impairment Losses - Mine (To record the impairment of mine) Debit 150000 |||| ]] [[ Credit 200000 150000 200000
Riverbed Corp., a mining company, owns a significant mineral deposit in a northern territory. Riverbed prepares financial statements in accordance with IFRS. Included in the asset is a road system that was constructed to give company personnel access to the mineral deposit for maintenance and mining activity. The road system cannot be sold separately and separate cash flow information is not available for it. The carrying amounts of two cash-generating units of the mine at June 30, 2023, are as follows: Machinery Mine in the development phase The machinery's value in use has been assessed at $4,800,000 while the fair value less costs to sell is $4,100,000. With respect to the mine, the value in use is $8,200,000 while fair value less costs to sell is $8.590,000. Date $4,300,000 (b) Determine if the machinery and the mine are impaired and prepare the journal entries, if any, to record the impairment at June 30. 2023. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts List all debit entries before credit entries.) June 30, 2023 $8,740.000 June 30, 2023 Account Titles and Explanation Loss on Impairment Accumulated Impairment Losses - Machinery (To record the impairment of machinery) Loss on Impairment Accumulated Impairment Losses - Mine (To record the impairment of mine) Debit 150000 |||| ]] [[ Credit 200000 150000 200000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Riverbed Corp., a mining company, owns a significant mineral deposit in a northern territory. Riverbed prepares financial statements in
accordance with IFRS. Included in the asset is a road system that was constructed to give company personnel access to the mineral
deposit for maintenance and mining activity. The road system cannot be sold separately and separate cash flow information is not
available for it. The carrying amounts of two cash-generating units of the mine at June 30, 2023, are as follows:
Machinery
Mine in the development phase
The machinery's value in use has been assessed at $4,800,000 while the fair value less costs to sell is $4,100,000. With respect to the
mine, the value in use is $8,200,000 while fair value less costs to sell is $8.590,000.
(b) Determine if the machinery and the mine are impaired and prepare the journal entries, if any, to record the impairment at June 30,
2023. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No
Entry for the account titles and enter 0 for the amounts. List all debit entries before credit entries.)
Date
$4,300,000
$8,740,000
June 30, 2023
June 30, 2023
Account Titles and Explanation
Loss on Impairment
Accumulated Impairment Losses - Machinery
(To record the impairment of machinery)
Loss on Impairment
Accumulated Impairment Losses - Mine
(To record the impairment of mine)
Debit
150000
200000
Credit
150000
W
200000
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