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Blues Ltd purchased a machinery on 1 July 2019 for $200,000 which will have a scrap value of $20,000 after 10 years of useful life. The machinery is depreciated on straight line basis over its useful life. On 1 July 2022 the impairment review indicates the machinery's value in use is $120,000 and its current fair value less costs to disposal is $132,000. There is no change in the initial useful time and scrap vale estimates. After the discussion with the auditors the machinery value is adjusted for the impairment loss on 1 July 2022. The balance date is 30 June for Blues Ltd. Required: (a) Prepare the necessary journal entry to account the impairment loss as per AASB 136 "Impairment of Assets" on 1 July 2022. (Narrations are not required). (b) Calculate the depreciation expense on 30 June 2023.

Blues Ltd purchased a machinery on 1 July 2019 for $200,000 which will have a scrap value of $20,000 after 10 years of useful life. The machinery is depreciated on straight line basis over its useful life. On 1 July 2022 the impairment review indicates the machinery's value in use is $120,000 and its current fair value less costs to disposal is $132.000. There is no change in the initial useful time and scrap vale estimates. After the discussion with the auditors the machinery value is adjusted for the impairment loss on 1 July 2022. The balance date is 30 June for Blues Ltd. Required: (a) Prepare the necessary journal entry to account the impairment loss as per AASB 136 "'mpaiment of Assets" on 1 July 2022. (Narrations are not required). (b) Calculate the depreciation expense on 30 June 2023

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