Crossbow Ltd is an entity that specialises in the manufacture of leather footwear for women. It has aggressively undertaken a strategy of buying out other companies that had competing products. These companies were liquidated and the assets and liabilities brought into Crossbow Ltd.
At 30 June 2015, Crossbow Ltd reported the following assets in its statement of financial position:
Land $200 000
Inventory products 180 000
Brand ‘Crossbow Shoes’ 160 000
Shoe factory 700 000
Machinery for manufacturing shoes 400 000
Goodwill on acquisition of competing companies 40 000
$1 680 000
Because of the competition from overseas as customers pursue a strategy of buying online rather than visit Crossbow Ltd’s stores, Crossbow Ltd assessed its impairment position at 30 June 2015. The indicators suggested that an impairment loss was probable. Crossbow Ltd calculated a recoverable amount of its company of $1 420 000. The fair value less costs of disposal of the land was $171 000.
Required
Prepare the journal entry(ies) for any impairment loss occurring at 30 June 2015.
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