Prepare the journal entry for any impairment loss

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QUESTION - IMPAIRMENT OF THE ASSETS - 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 2020, the entire company would be considered as a single cash generating unit:

Cash $300,000

Inventory 200,000

Factory Building 700,000

Accumulated depreciation - factory (300,000)

Machinery 600,000

Accumulated depreciation - machinery (300,000)

Land 300,000

Goodwill 30,000

$1,530,000

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 $1,400,000.

Required - Prepare the journal entry for any impairment loss occurring at 30 June 2020?

Reference no: EM132972884

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