1. On January 1 year 3, White Company bought a building for Br
500,000. The building has an estimated useful life of 25 years with
no residual value. White uses the straight line method to
depreciate its building. On December 31, year 4 the recoverable
amount of the building Br 400,000 and on December 31, year 6 the
recoverable amount of the building is Br 450,000
Required:
a) Calculate the amount to be recorded as impairment loss and show
the necessary journal entries on December 31, year 4
b) Record the loss reversal (if there is any ) on December 31, year
6
.
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