Gairdner Limited recognised an impairment loss of $50 000 against a cash-generating unit consisting of the...
Gairdner Limited recognised an impairment loss of $50 000 against a cash-generating unit consisting of the following assets: buildings $500 000; roads $300 000; and equipment $600 000. The net carrying amount of the roads after allocation of the impairment loss is: Select one:
a. $282 143.
b. $310 714.
c. $278 571.
d. $289 286
Homework Answers
Answer is option D) $289,286
Value of road = $300,000
Total value of cash generating Unit= (500000+300000+600000)= $1,400,000
Allocation of Impairment Loss to road =$50,000*$300,000/$1,400,000
=$10,714
Carrying Amount of Road = $300,000-$10.714
= $289,286
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