Civil engineering and constuction

Q

1. In allocating an impairment loss for a cash generating unit which of the following assets would not be given a portion of the loss – land; machinery; inventory; manufacturing licence; receivables? Why? (1 Mark)

2. How is an impairment test undertaken? (2 Marks)

3. Peppermint Ltd has determined that its orchard division has suffered an impairment loss of $42 000 for the year ended 30 June 2013. At that date the carrying amount of the division's assets were $

Inventory 21 000 Land 200 000

Fruit Trees 114 000

Reticulation Systems 36 000 Goodwill 60 000

Required Allocate the loss across the assets of the CGU in accordance with AASB 136, paragraph 104 and prepare the journal entry to record the loss. Show all workings. (2 Marks)

4. What is an impairment loss? (1 Mark)

5. What is a cash-generating unit? (1 Mark)

6. Silkyoak Ltd has determined that its nursery division is a CGU. The carrying amounts of the net assets of the division at 30 June 2013 are: Land 80 000 Propagating Sheds 48 000

Sales Office 25 000 Equipment (net) 56 000

Inventory 35 000 Receivables 19 000

Accounts Payable (26 000) Mortgage Loan (50 000)

Silky Oak Ltd has calculated the value in use of the division to be $327 000. Required Determine if an impairment loss exists for the nursery division. Show all workings. (1 Mark)

7. In allocating an impairment loss for a CGU the carrying amount of any individual asset must not be reduced below what figure? (1 Mark)

8. Hovea Ltd has determined that its transport division has suffered an impairment loss of $52 000 for the year ended 30 June 2013. At that date the carrying amount of the division's assets were $ Receivables 31 000

Inventory 18 000 Land 150 000

Trucks (net) 250 000 Servicing Unit 50 000

Required

Allocate the loss across the assets of the CGU in accordance with AASB 136, paragraph 104. Show all workings. (3 Marks)

9. How is value in use for a cash generating unit calculated? (2 Marks) 10. Supersatumas grows citrus fruit on a number of orchards in the Perth Hills. This fruit is then processed into fruit juice and other products at their cannery. These products are then sold to the public via their chain of Jucymarket stores. How many cash generating units would the company have? Why? (2 Marks)

11. If a portion of an impairment loss for a CGU cannot be allocated to one of the unit's assets because it will breach AASB 136 paragraph 105 what happens to that portion? (1 Mark)

12. Timbertown Ltd processes pine trees grown on its own plantations in its timber mills. The milled timber is then made into outdoor furniture for sale to the public. How many cash generating units would the company have? Why? (2 Marks) 13. Gumtree Ltd has determined that its picnic ware division is a CGU. The carrying amounts of the net assets of the division at 30 June 2013 are: Factory (net) $310 000 Land 200 000 Equipment (net) 120 000

Inventory 75 000 Receivables 32 000 Accounts Payable (17 000)

Gumtree Ltd has calculated the value in use of the division to be $680 000.

Required Determine if an impairment loss exists for the picnic ware division. Show all workings. (1 Mark)

14. What is 'value in use'? (1 Mark) 15. When should an entity conduct an impairment test? (2 Marks

16. Can an impairment loss, once recorded, be reversed? (2 Marks)

17. Tuart Ltd has determined that its retail division has suffered an impairment loss of $37 000 for the year ended 30 June 2013. At that date the carrying amount of the division's assets were $ Inventory 92 000 Shop Fittings (net) 40 000 Land 100 000

Buildings 180 000 Additionally, the company has corporate assets worth $150 000, one third of which have been allocated to the retail division. Required

Allocate the loss across the assets of the CGU in accordance with AASB 136, paragraph 104. Show all workings (3 Marks) 18. How are corporate assets tested for impairment? (2 Marks)