Prepare the journal entries for any impairment loss

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Reference no: EM131329547

Assignment

This assignment has 2 parts, 1000 + 10% word theory interpretation essay and a response to a practical application of the theory.

The assignment must be typed, use Arial font, 12, to avoid plagiarism, make sure you do proper referencing, at least use 6 references, to be submitted the soft copy in Turnitin and hard copy in lecture Week 10. Please ensure you attach a KOI assignment cover sheet, with ID numbers and signed. Late assignments will be penalised, 10% deduction per day.

Part A:

1000 word short essay about the following:

At 30 June 2014, Longreach Ltd is considering undertaking an impairment test. Having only recently adopted the international accounting standards, the management of Longreach Ltd seeks your advice in relation to this test under AASB 136 Impairment of Assets.

Required

Write a report to management, specifically explaining:

1. the purpose of the impairment test

2. how the existence of goodwill will affect the impairment test

3. the basic steps to be followed in applying the impairment test.

Part B:

Crossbow Ltd is an entity that specialises in the manufacture of leather footwear for women. It has aggressively undertaken a strategy of buying out other companies that had competing products. These companies were liquidated and the assets and liabilities brought into Crossbow Ltd.

At 30 June 2015, Crossbow Ltd reported the following assets in its statement of financial position:

               Land                                                    $200 000

               Inventory products                               180 000

               Brand 'Crossbow Shoes'                      160 000

               Shoe factory                                          700 000

               Machinery for manufacturing shoes   400 000

               Goodwill on acquisition of competing companies 40 000

                                                                         $1 680 000

Because of the competition from overseas as customers pursue a strategy of buying online rather than visit Crossbow Ltd's stores, Crossbow Ltd assessed its impairment position at 30 June 2015. The indicators suggested that an impairment loss was probable. Crossbow Ltd calculated a recoverable amount of its company of $1 420 000. The fair value less costs of disposal of the land was $171 000.

Required

Prepare the journal entry(ies) for any impairment loss occurring at 30 June 2015.

Verified Expert

The assignment consists of 2 parts. Part A provides a 1000 word discussion on purpose of impairment test, existence of goodwill affecting the impairment test and the basic steps involved in applying the impairment test. The part B is a practical question which provides for the calculations, discussion and journal entry for the impairment loss occurred at 30th June, 2015

Reference no: EM131329547

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Reviews

len1329547

12/27/2016 11:49:08 PM

Research – extent and application Integration and originality in the selection and handling of relevant theory to build and justify analysis. Wide range of current and relevant sources integrated in systematic way. Value 10% Mark awarded Analysis of the question Identifies and insightfully discusses areas of strength and weakness in the organisation’s capabilities. Strong links to organisational context and relevant theory in evaluation. Value 20% All aspects of the task completed in a comprehensive and cohesive manner Mark awarded Recommendations / conclusions Excellent recommendations made, linked to the evaluation. Theory used in insightful way to justify recommendations and discuss enhancement of the organisation’s capabilities Value 10% Mark awarded Calculations Performs accurate calculations which are sufficiently comprehensive to solve the problem(s). All formulae and workings provided. No errors Value 30% Mark awarded Journal Entries Gives a complete response Value 20% Mark awarded Presentation Highly professional presentation – satisfies all presentation elements. Correct referencing throughout Value 10% Mark awarded

len1329547

12/27/2016 11:47:46 PM

my subject name is corporate accounting and reporting. assignment has two part. one is theory part nd pratical. please write each part individually. This assignment has 2 parts, 1000 + 10% word theory interpretation essay and a response to a practical application of the theory. The assignment must be typed, use Arial font, 12, to avoid plagiarism, make sure you do proper referencing, at least use 6 references, to be submitted the soft copy in Turnitin and hard copy in lecture Week 10. Please ensure you attach a KOI assignment cover sheet, with ID numbers and signed

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