Reference no: EM132569989

Question - ABC Pty Ltd reported the following information in its statement of financial position at 30 June 2020

Plant $120,000

Accumulated depreciation - plant (25,000)

Intangible assets 55,000

Accumulated amortization (20,000)

Land 55,000

Total non-current assets 185,000

Cash 10,000

Inventories 30,000

Total current assets 40,000

Total assets 225,000

Liabilities 30,000

Net assets 195,000

At 30 June 2020, ABC Ltd analysed the internal and external sources of information that would indicate deterioration in the worth of its assets. It determined that there were indications of impairment. ABC calculated the recoverable amount of the assets to be $190,000.

Required -

A. Calculate the impairment loss.

B. Allocate the impairment loss to the different assets.

C. Prepare the journal entry for any impairment loss at 30 June 2020.