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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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- The company provided the data of PP&E in a cash-generating unit (CGU) as follows:
|
|
Cost |
|
|
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
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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