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-   -   Depriciation account (https://www.askmehelpdesk.com/showthread.php?t=406895)

  • Oct 17, 2009, 06:58 AM
    ripon327
    Depriciation account
    At 30 June 2009, Smithers Ltd reported the following assets:
    Land $ 50 000
    Plant 250 000
    Accumulated depreciation (50 000)
    Goodwill 8 000
    Inventory 40 000
    Cash 2 000








    Additional information:

    • All assets are measured using the cost model.

    • At 30 June 2009, the recoverable amount of the entity, considered to be a single cash-generating unit, was $272 000.

    • For the period ending 30 June 2010, the depreciation charge on plant was $18 400. If the plant had not been impaired the charge would have been $25 000.

    • At 30 June 2010, the recoverable amount of the entity was calculated to be $13 000 greater than the carrying amount of the assets of the entity. As a result, Smithers Ltd recognised a reversal of the previous year’s impairment loss.

    Required:
    • Prepare the journal entries relating to the impairment at 30 June 2009.

    • Prepare the journal entries relating to the impairment at 30 June 2010.

    • Explain in your own words, using appropriate referencing, what guidance is provided by the standards in relation to recognition and reversal of impairment losses.
  • Oct 17, 2009, 04:02 PM
    morgaine300

    Please see the guidelines for posting homework:
    Ask Me Help Desk - Announcements in Forum : Homework Help

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