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The company provided the data of PP&E in a cash-generating unit (CGU) as follows:   Cost Accumulated Depreciation Equipment A   $ 15,000 $ 8,000 Equipment B      30,000 19,000 Equipment C      45,000 23,000         The unit’s fair value less costs to sell was $25,000.  The unit’s future cash flows       was $32,000, and its present value was $28,000.  The company adopted IFRS.        Prepare journal entries to record impairment. If the recoverable amount of Equipment C is $19,000, prepare journal entries to record impairment. If the recoverable amount of Equipment C is $24,000, prepare journal entries to record impairment.

The company provided the data of PP&E in a cash-generating unit (CGU) as follows:   Cost Accumulated Depreciation Equipment A   $ 15,000 $ 8,000 Equipment B      30,000 19,000 Equipment C      45,000 23,000         The unit’s fair value less costs to sell was $25,000.  The unit’s future cash flows       was $32,000, and its present value was $28,000.  The company adopted IFRS.        Prepare journal entries to record impairment. If the recoverable amount of Equipment C is $19,000, prepare journal entries to record impairment. If the recoverable amount of Equipment C is $24,000, prepare journal entries to record impairment.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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  1. The company provided the data of PP&E in a cash-generating unit (CGU) as follows:

 

Cost

Accumulated Depreciation

Equipment A

  $ 15,000

$ 8,000

Equipment B

     30,000

19,000

Equipment C

     45,000

23,000

 

      The unit’s fair value less costs to sell was $25,000.  The unit’s future cash flows

      was $32,000, and its present value was $28,000.  The company adopted IFRS.

 

    

  • Prepare journal entries to record impairment.
  • If the recoverable amount of Equipment C is $19,000, prepare journal entries to record impairment.
  • If the recoverable amount of Equipment C is $24,000, prepare journal entries to record impairment.

 

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