Shelley Beach Plc Has One Cash Generating Unit (CGU)and It

question 50

Multiple Choice

Shelley Beach Plc has one cash generating unit (CGU) and it has been determined that the CGU has incurred an impairment loss of £80 000 for the year ended 30 June 2014. The carrying amounts of the assets as at 30 June 2014 are as follows $$\begin{array} { | l | r | } \hline & \text { Carrying amount } \\\hline \text { Buildings } & 300000 \\\hline \text { Equipment } & 300000 \\\hline \text { Goodwill } & 20000 \\\hline \text { Total } & 620000 \\\hline\end{array}$$ In accordance with IAS 36 Impairment of Assets,what is the appropriate journal entry to recognise the impairment loss for Shelley Beach Plc?

• A) \[\begin{array} { | c | l | l | l | }
• \hline \mathrm { Dr } & \text { Impairment loss } & 80000 & \\
• \hline \mathrm { Cr } & \text { Accumulated impairment loss-buildings } & & 30000 \\
• \hline \mathrm { Cr } & \text { Accumulated impairment loss-equipment } & & 30000 \\
• \hline \mathrm { Cr } & \text { Accumulated impairment loss-goodwill } & & 20000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | l | r | l | }
• \hline \text { Dr } & \text { Impairment loss-identifiable intangible assets } & 80000 & \\
• \hline \mathrm { Cr } & \text { Accumulated impairment loss-buildings } & & 40000 \\
• \hline \mathrm { Cr } & \text { Accumulated impairment loss-equipment } & & 40000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | l | r | r | }
• \hline \mathrm { Dr } & \text { Impairment loss-identifiable intangible assets } & 60000 & \\
• \hline \mathrm { Dr } & \text { Impairment loss-goodwill } & 20000 & \\
• \hline \mathrm { Cr } & \text { Accumulated impairment loss-buildings } & & 30000 \\
• \hline \mathrm { Cr } & \text { Accumulated impairment loss-equipment } & & 30000 \\
• \hline \mathrm { Cr } & \text { Accumulated impairment loss-goodwill } & & 20000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | l | r | l | }
• \hline \mathrm { Dr } & \text { Impairment loss } & 80000 & \\
• \hline \mathrm { Cr } & \text { Buildings } & & 30000 \\
• \hline \mathrm { Cr } & \text { Equipment } & & 30000 \\
• \hline \mathrm { Cr } & \text { Goodwill } & & 20000 \\
• \hline
• \end{array}\]

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Definitions:

Evolutionary Fitness

A measure of an organism's ability to survive and reproduce, often influencing the traits that get passed on to future generations.

Communication System

An arrangement or network used to transmit, receive, and process information between parties.

Nationwide Shipments

The transportation of goods across an entire country, encompassing logistics and distribution practices that facilitate the movement of products from one region to another.

Telegraph

An outdated form of communication technology that transmits text messages over long distances through the use of coded signals.