Impairmentloss goodwill accumulateddepreciationand

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Unformatted text preview: on to Angelica, reduce goodwill by $25 andallocate the remaining $175 impairment loss to applicable assets: Carrying Proportion Allocation Net Carrying Amount of Excess Amount Plant 850 85/109 136 714 Patent 240 24/109 39 201 175 1 090 As the patent has a fair value less costs to sell of $220, only $20 of the impairment loss can be allocated to it, so the plant must be reduced by a further $19, to $695. Impairment loss Goodwill Accumulated depreciation and impairment losses –plant Accumulated amortisation and impairment losses – patent Dr Cr 200 000 25 000 Cr 155 000 Cr 20 000 6 Problem 13.1 Allocation of corporate asset and goodwill TIGER LTD Division 1: Calculate impairment loss: Total assets = $422 000 + $7 000 (1/2 goodwill) + $80 000 (1/2 head office) (carrying amount) = $509 000 Value in use = $415 000 Impairment loss = $94 000 Allocate impairment loss: Write‐off goodwill of $7 000 Allocate remaining $87 000 to all assets except cash, inventory and receivables. CA Ratio Loss Plant $200 000 20/44 39 545 Land 90 000 9/44 17 796 Buildings 70 000 7/44 13 841 8/44 15 818 HO Building 80 000 $87 000 $440 000 Journal entry: Impairment loss Dr 94 000 Goodwill Cr 7 000 Land Cr 17 796 Accumulated depreciation & impair...
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