Corporate Reporting

1. The assignment is a compulsory group assignment and is worth 5% of the total marks of the subject.
2. The group should be comprised of four (4) students. It is the responsibility of students to form the groups. Only one copy of the group assignment must be submitted on behalf of the group by one of the group members. Students must make sure that the completed Assignment Declaration form is attached including students’ details (students’ names and IDs) with the assignment.
3. You must keep a copy of your assignment (in hard copy form) until you receive the marked original back. If your assignment is lost and you fail to provide us with a copy of the assignment when requested, we will assume the assignment was not written and the penalties for late assignment will be applied.
4. The assignment must be presented in a professional manner (word processed).
5. Submissions must be properly referenced (refer to the University Style Guide).
6. Plagiarism is a serious matter; all students involved will be referred to the University’s appropriate authority.
7. Late submission will incur a penalty of one mark per day including the weekend. Late submission must be lodged with Course Coordinator only.
8. Application for extensions must be lodged with the Course Coordinator before due date in writing for granting an extension (medical problems etc.).
9. Assignment must be submitted through the LMS.
Note 1: Word limit for the Question is 500.

 

Spear Ltd reported the following information in its statement of financial position at 30 June 2016:

Plant $650 000
Accumulated depreciation – plant (150 000)
Intangible assets 300 000
Accumulated amortisation (100 000)
Land 300 000
Total non-current assets 1 000 000
Cash 50 000
Inventories 180 000
Total current assets 230 000
Total assets $1 230 000
Liabilities 150 000
Net assets $1 080 000

At 30 June 2016, Spear Ltd analysed the internal and external sources of information that would indicate deterioration in the worth of its assets. It determined that there were indications of impairment.

Spear Ltd calculated the recoverable amount of the assets to be $980 000.

Required

1. Calculate impairment loss;
2. Determine net carrying amount;
3. Provide the journal entry for any impairment loss at 30 June 2016.

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