- Bramble Corp A Mining Company Owns A Significant Mineral Deposit In A Northern Territory Bramble Prepares Financial 1 (56.03 KiB) Viewed 17 times
Bramble Corp., a mining company, owns a significant mineral deposit in a northern territory. Bramble prepares financial statements in accordance with IFRS. Included in the asset is a road system that was constructed to give company personnel access to the mineral deposit for maintenance and mining activity. The road system cannot be sold separately and separate cash flow information is not available for it. The carrying amounts of two cash-generating units of the mine at June 30, 2020, are as follows: Machinery $4,200,000 Mine in the development phase $8,760,000 The machinery's value in use has been assessed at $4,700,000 while the fair value less costs to sell is $4,000,000. With respect to the mine, the value in use is $8,400,000 while fair value less costs to sell is $8,610,000. (b) Determine if the machinery and the mine are impaired and prepare the journal entries, if any, to record the impairment at June 30, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
(b) Determine if the machinery and the mine are impaired and prepare the journal entries, if any, to record the impairment at June 30, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit June 30, 2020 Accumulated Impairment Losses - Machinery 20,000 Machinery (To record the impairment of machinery) Accumulated Impairment Losses - Mine 150,000 Mineral Resources (To record the impairment of mine) June 30, 2020 11 20,000 150,000