Sunnyskies Ltd is an Australian business that manufactures solar panels for domestic use. The assessment of internal and external indicators in the 2020-21 period suggested that an impairment loss was probable. At 30 June 2021, Sunnyskies Ltd reported the following assets and recoverable amount Cash$80,000 Solar panels inventory260,000 Trademark240,000 Factory at cost2,400,000 Accumulated depreciation – factory(600,000) Machinery for manufacturing solar panels1,100,000 Accumulated depreciation – machinery(300,000) Goodwill on acquisition of competing companies120,000 Total assets$3,300,000 Recoverable amount$2,800,000 Required: Prepare the journal entry(ies) for any impairment loss occurring at 30 June 2021.

Impairement loss is the reduction in the market value of assets…

Answered: Sunnyskies Ltd is an Australian…

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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Sunnyskies Ltd is an Australian business that manufactures solar panels for domestic use.
The assessment of internal and external indicators in the 2020-21 period suggested that an impairment loss was probable.
At 30 June 2021, Sunnyskies Ltd reported the following assets and recoverable amount

	Cash	$80,000
	Solar panels inventory	260,000
	Trademark	240,000
	Factory at cost	2,400,000
	Accumulated depreciation – factory	(600,000)
	Machinery for manufacturing solar panels	1,100,000
	Accumulated depreciation – machinery	(300,000)
	Goodwill on acquisition of competing companies	120,000
	Total assets	$3,300,000
	Recoverable amount	$2,800,000

Required:
Prepare the journal entry(ies) for any impairment loss occurring at 30 June 2021.

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