At reporting date Guilder Limited estimated an impairment loss of $50 000 against its single cash-generating unit.The company had the following assets: Headquarters Building $100 000; Plant $60 000; Equipment $40 000.The net carrying amount of the Plant after allocation of the impairment loss is:

Question

Quizplus · Accepted Answer

As an impairment loss of $50 000 is estimated against the cash-generating unit, the carrying amounts of assets must be reduced accordingly. The carrying amount of the Plant, which is $60 000, will be reduced by the estimated impairment loss of $50 000, leaving the net carrying amount of the Plant at $10 000 ($60 000 - $50 000 = $10 000). Therefore, the correct choice is B, $45 000.

At Reporting Date Guilder Limited Estimated an Impairment Loss of $50