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Record the impairment loss in respect of the cash-generating

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Reference no: EM132547913

Whitecross Ltd has a cash-generating unit with a carrying amount of $480,000 as at 30 June 2016 as follows:

Asset               Carrying amount

Goodwill              $30,000

Buildings             225,000

Equipment           90,000

Land                  135,000

Total                  480,000

On 30 June 2016, the cash-generating unit was assessed for impairment and the recoverable amount is determined to be $350,000.

Required

Question 1: Provide the journal entry on 30 June 2016 to record the impairment loss in respect of the cash-generating unit.

Question 2: Explain how your answer would change if, as at 30 June 2016, the fair value less costs of disposal of the equipment was $77,000?

Reference no: EM132547913

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