Prepare appropriate journal entries for the impairment loss

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Reference no: EM132158616

Question -

(a) How should be the reversal of an impairment loss be accounted for?

(b) Azalea Ltd has determined that its China division is a cash-generating unit. The carrying amounts of the assets at 30 June 2015 are as follows:

Factory

$210,000

Land

$150,000

Equipment

$120,000

Machinery

$60,000

Azalea Ltd calculated the Value in Use of the division to be $510,000 and Fair Values less Cost to Sell (net selling price) of $480,000.

Required - Prepare the appropriate journal entries for the impairment loss, assuming that the fair values less cost to sell of the land are:

a) $140,000

b) $145,000

Reference no: EM132158616

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