Prepare journal entries in general journal format to account

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On 1 July 2018 Simpsons Ltd has plant and machinery at a cost of $80,000 with accumulated depreciation of $52,000. Annual depreciation is $7,000 per annum with a useful life of 4 years.

The global financial crisis saw a downturn in the business activities of Simpsons Ltd and there were a number of external indicators that the plant and machinery assets were impaired. It was determined that the value in use of this asset was $23,200 and the fair value less costs to sell was $24,200.

On 1 July 2019, the factors causing the impairment of the asset no longer exist. At this time, the fair value less costs to sell was still $24,200 but the value in use was now determined to be $25,000.

Required:

Question 1: Prepare journal entries in general journal format to account for these events. Ignore narrations.

Reference no: EM132545997

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