The draft financial statements of Plethora plc for the year to 31 December 20X9 are being prepared and the accountant has requested your advice on dealing with the following issues. Plethora plc owns a retail business which has suffered badly during the recession. Plethora plc treats this business as a separate cash generating unit. The carrying amounts of the assets comprising the retail business are: Building: $900,000 Plant and equipment: $300,000 Inventory: $70,000 other current assets: $130,000 goodwill: 40,000 An impairment review has been carried out as at 31 December 20X9 and the recoverable amount of the cash generating unit is estimated at $1.3m. What will be the carrying amount of the building and inventory after the impairment loss has been accounted for?

The draft financial statements of Plethora plc for the year to 31 December 20X9 are being prepared and the accountant has requested your advice on dealing with the following issues. Plethora plc owns a retail business which has suffered badly during the recession. Plethora plc treats this business as a separate cash generating unit. The carrying amounts of the assets comprising the retail business are: Building: $900,000 Plant and equipment: $300,000 Inventory: $70,000 other current assets: $130,000 goodwill: 40,000 An impairment review has been carried out as at 31 December 20X9 and the recoverable amount of the cash generating unit is estimated at $1.3m. What will be the carrying amount of the building and inventory after the impairment loss has been accounted for?

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

ChapterMB: Model-building Problems

Section: Chapter Questions

Problem 14M

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