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Homework answers / question archive / Spear Ltd provides the following information regarding a cash generating unit (CGU) during the 2014 and 2015 reporting period: Information for year ended 30

Spear Ltd provides the following information regarding a cash generating unit (CGU) during the 2014 and 2015 reporting period: Information for year ended 30

Accounting

Spear Ltd provides the following information regarding a cash generating unit (CGU) during the 2014 and 2015 reporting period: Information for year ended 30.6.2014 Assets Carrying amount Plant (cost $300,000) $200,000 Patent $40,000 Receivables $50,000 Goodwill $60,000 $20,000 Cash Recoverable amount S280,000 Note: Receivables are all collectable (not impaired) Information for year ended 30.6.2015 For the period ending 30 June 2015, the depreciation charge on plant was increased to $25,000. If the plant had not been impaired the charge would have been $20,000. At 30 June 2015, the recoverable amount of the CGU was calculated to be $60,000 greater than the carrying amount of the assets of the CGU. Required: Prepare the journal entries to record the above events for the year ended 30 June 2014. (Ignore any tax effect) DATE DETAILS DEBIT CREDIT 2014 Impairment Loss $90,000 30 June Ace Dep & Impair. Loss - plant 25,000 Acc Amort. & Impair Loss - patent 5.000 Goodwill 60,000 Asset Carrying Amount (5) Proportion Allocation of Impairment Loss Net Carrying Amount (S) Plant 200,000 200/240*30,000 40/240*30,000 25.000 5,000 175,000 35,000 Patent 40,000 240.000 30,000 Goodwill 60,000 60.000 0 90.000

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