User Account

All Pages

Determine the amount of the impairment loss

Assignment Help Financial Accounting
Reference no: EM132790085

Question - Fast Delivery Ltd in 2012 started its delivery business in Melbourne delivering medical supplies to South Melbourne region. On 1 July 2018, Fast Delivery Ltd acquired Freezer Utes for use in its delivery services business. Fast Delivery Ltd has provided you with the following information relating to its acquisition of the Utes:

Cost at acquisition date: 1 July 2018 $1,080,000

Estimated useful life: 10 years

Expected residual value: $180,000

Depreciation method: straight-line basis over its useful life Straight-line

Carrying amount: 30 June 2020 $900,000

At the end of the 2020 reporting period the annual review of all Utes found that this particular item of Utes had incurred significant damage because of harsh weather condition in South Melbourne. Fast Delivery Ltd used an external firm of Actuaries to provide the fair values of its Utes. The actuaries as a result of the damage, estimated the fair value less costs of disposal of the Utes at the end of the reporting period as follows:

Annual review end of the 2020, fair value less costs of disposal $540,000

Expected annual net cash flows next 8 years $94,500

Expected residual value Unchanged

The management of Fast Delivery Ltd and the actuaries uses a discount rate of 9 per cent for calculations of this kind.

REQUIRED - Determine whether Fast Delivery Ltd has incurred an impairment loss in relation to the asset. If so, determine the amount of the impairment loss, and provide the journal entry necessary to recognise any impairment in the Utes.

Reference no: EM132790085

Questions Cloud

What is the basic loss per share : If the entity issued only ordinary shares, and it has a net income of P2,500,000, what is the basic loss per share? December 1 Treasury shares resold 12,000
Why the hdi might be better than real gdp : The United Nations' Human Development Index (HDI) is based on real GDP per person, life expectancy at birth, and indicators of the quality and quantity of educa
What are the major themes in the given source : Please pick one of the sources for today's readings. What are the major themes in that source? What does it tell us about the changing nature of American.
Which method results in the highest net income during period : Which method results in the highest net income during a period of rising unit prices? how Weighted-average cost inventory costing methods is used
Determine the amount of the impairment loss : Determine the amount of the impairment loss, and provide the journal entry necessary to recognise any impairment in the Utes
What is your reaction to the given conflict : One of the major divisions found within the practice of Islam today is a centuries old conflict that exists between the two major Islamic groups identified.
How does oligopoly and game theory potentially : How does oligopoly and game theory potentially affect business?
Explain the process of an arbitration hearing : Should her grievance go to arbitration? Explain the process of an arbitration hearing and if desirous by Tatianna to resolve her claim, identify the criteria
Journalise the transaction for coldwear pte : Deposit the credit card receipts into its bank account immediately. Apply the five steps process of FRS 115 to the sales and journalise the transaction.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd