Reference no: EM132842228
Michel Ltd determined that its New Zealand division as a cash-generating unit. The carrying amounts of the assets at 30 June 2020 are as follows;
Building $150 000
Land 200 000
Patent 30 000
Goodwill 60 000
Inventory 10 000
Total Carrying amount 450,000
Additional information,
The value-in use of the cash generating unit as at 30 June 2020 would be $330,000.
Problem 1: The journal entry to record impairment loss:
Select one:
a. Dr Accumulated impairment loss Building $23,684, Dr Land $31,579, Dr Accumulated amortization and impairment loss-Brand $4,737, Dr Goodwill $60,000 , Cr Impairment loss $120,000,
b. Dr Impairment loss $170,000, Cr Accumulated impairment loss Building $56,250, Cr Land $37,500 , Cr Accumulated amortization and impairment loss-Brand $6,250 , Cr Inventory $10,000 , Cr Goodwill $60,000
c. Dr Accumulated impairment loss Building $56,250, Dr Land $37,500 , Dr Accumulated amortization and impairment loss-Brand $6,250 , Dr Inventory $10,000 , Dr Goodwill $60,000 , Cr Impairment loss $170,000
d. Dr Impairment loss $120,000, Cr Accumulated impairment loss Building $23,684, Cr Land $31,579 , Cr Accumulated amortization and impairment loss-Brand $4,737 Cr Goodwill $60,000