Calculate impairment loss and allocation of impairment loss

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Question - Rainier Ltd reported the following assets in its statement of financial position at 30 June 2022.

Information Technology (IT) network $116,000

Land 290,000

Plant 960,000

Accumulated Depreciation - Plant (384,000)

Goodwill 32,000

Patent 255,000

Accumulated Amortization - Patent (102,500)

Cash 12,000

Inventory 80,000

Receivable 40,000

1,299,000

Liabilities (189,000)

Net Assets 1,110,000

Rainier Ltd's management undertook impairment testing at 30 June 2022 and determined the recoverable amount of Rainier to be fair value less costs of disposal $1,215,000 an value in use $1,100,000.

Required -

1. Calculate impairment loss and allocation of impairment loss.

2. Prepare the journal entry for any impairment loss at 30 June 2022.

Reference no: EM133034857

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