Reference no: EM132847895

Question - IMPAIRMENT OF THE ASSETS - XYZ Ltd is an entity that specialises in the manufacture of leather footwear for women. The company reported the following assets in its statement of financial position at 30 June 2020, the entire company would be considered as a single cash generating unit:

Cash $160,000

Inventory 200,000

Factory Building 920,000

Accumulated depreciation - factory (320,000)

Machinery 640,000

Accumulated depreciation - machinery (340,000)

Brand 100,000

Goodwill 40,000

$1,400,000

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 2020. The indicators suggested that an impairment loss was probable. XYZ Ltd calculated a recoverable amount of its company of $1,260,000.

Required - Prepare the journal entry(ies) for any impairment loss occurring at 30 June 2020 (Show all your workings).