Prepare the journal entries for any impairment loss occurring at 30 June2015.
Carrying amount of assets=$1 500 000
Recoverable amount=$1 420 000
Impairment loss=$80 000
The impairment loss is firstly used to write off the goodwill of $40 000.
The balance of the loss, $40 000, is allocated across the other assets, except for cash and inventory, assuming it is recorded at the lower of cost and netrealisable value:
|
Carrying amount
|
Proportion
|
Allocation of loss
|
Net carrying amount
|
|
Brand
|
160 000
|
16/126
|
5079
|
154 921
|
|
factory
|
700 000
|
70/126
|
22 222
|
677 778
|
|
machinery
|
400 000
|
40/126
|
12 699
|
387 301
|
|
1 260 000
|
|
40 000
|
|