In 2010,TallyHo Farms Acquired Production Machinery at a Cost of £410,000.In

question 48

Multiple Choice

In 2010,TallyHo Farms acquired production machinery at a cost of £410,000.In 2013 when accumulated depreciation was £160,000,Banbung reported an impairment loss of £75,000.Now,in 2017 the machinery has a book value of £140,000.The recoverable amount of the machinery is £235,000.and its value in use is £210,000.During impairment testing,Bambung recognized the possibility of a reversal of the previous impairment loss.What amount,if any,should Bambung recognize as a reversal of impairment loss?

• A)£95,000
• B)£75,000
• C)£40,000
• D)£25,000

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Definitions:

Opportunity Costs

Opportunity costs represent the benefits an individual, investor, or business misses out on when choosing one alternative over another.

Natural Disaster

A sudden and extreme event caused by natural processes of the Earth that can result in significant damage and loss.

Inward Shift

A decrease in the potential output of a good or service, often represented by a shift to the left of its supply or demand curve.

Production Possibility Frontier

A curve depicting all maximum output possibilities for two goods, given a set of inputs and technology, assuming efficient use of resources.