Prepare the statement of financial position extract at dec

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Reference no: EM132709597

Alaba Bhd rents out cars to tourist visiting an island. The cars were bought three years ago at a total cost of RM250,000 and being written off over period of five years. Recently, tsunami hit the island and the demand for the car-hire has dropped tremendously. Hence, Alaba Bhd could only generate RM25,000 cash per annum in x5 and x6. Alternatively, Alaba Bhd can sell the cars at a net selling price of RM40,000.

Required:

Problem 1: Calculate the impairment loss and prepare the statement of financial position extract at 31st December x4, assuming that Alaba Bhd's pre-tax cost of capital is 10%.

Reference no: EM132709597

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