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Lokton plc has a piece of equipment which it bought on 1 January 2014 for £1,000,000. The equipment has been depreciated annually at a rate of 10% on cost (with a zero disposal value assumed at the end of its useful life). At the year-end on 30 December 2020, the fair value of the equipment was £320,000. The value in use of this asset is estimated at £280,000. The current costs to sell the equipment amount to £50,000. What is the impairment loss? Select one: a. £0 b. £80,000 c. £198,297 d. £2,000 e. £20,000 f. £251,441 g. £120,000

Lokton plc has a piece of equipment which it bought on 1 January 2014 for £1,000,000. The equipment has been depreciated annually at a rate of 10% on cost (with a zero disposal value assumed at the end of its useful life). At the year-end on 30 December 2020, the fair value of the equipment was £320,000. The value in use of this asset is estimated at £280,000. The current costs to sell the equipment amount to £50,000. What is the impairment loss? Select one: a. £0 b. £80,000 c. £198,297 d. £2,000 e. £20,000 f. £251,441 g. £120,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Lokton plc has a piece of equipment which it bought on 1 January 2014 for £1,000,000. The equipment has been depreciated annually at a rate of 10% on cost (with a zero disposal value assumed at the end of its useful life). At the year-end on 30 December 2020, the fair value of the equipment was £320,000. The value in use of this asset is estimated at £280,000. The current costs to sell the equipment amount to £50,000.

What is the impairment loss?

Select one:
a.
£0
b.
£80,000
c.
£198,297
d.

£2,000

e.
£20,000
f.
£251,441
g.
£120,000
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