Reference no: EM132614049

XYZ Ltd is an entity that specialises in the manufacture of sports shoes. The company reported the following assets in its statement of financial position at 30 June 2019, the entire company would be considered as a single cash generating unit:

Cash                          $200 000

Inventory                  300 000

Factory Building            900 000

Accumulated depreciation - factory (300 000)

Machinery                   600 000

Accumulated depreciation - machinery (200 000)

Goodwill                     20 000

                           $1 520 000

Because of the competition from overseas as customers pursue a strategy of buying online rather than visit XYZ Ltd's stores, XYZ Ltd assessed its impairment position at 30 June 2019. The indicators suggested that an impairment loss was probable. XYZ Ltd calculated a recoverable amount of its company of $1 400 000.

Required

Question 1: Prepare the journal entry(ies) for any impairment loss occurring at 30 June 2019 (Show all your workings).