Impairment of assets Foodie Ltd has two separate cash generatingunits, ‘Fizzy Drinks’ and ‘Ice creamery’. At 30 June 2018, thecarrying amounts of the assets of the units, valued pursuant to thecost model, are as follows: Fizzy Drinks Ice creamery $ $ Cash18,000 14,000 Inventory 34,000 25,000 Fixtures and fittings 25,00035,000 Accumulated depreciation – fixtures and fittings (5,000)(10,000) Equipment 165,000 25,000 Accumulated depreciation –equipment (55,000) (15,000) Land and buildings 650,000 185,000Accumulated depreciation – buildings (25,000) (6,000) Patent 25,000- Goodwill 40,000 15,000 Total 872,000 268,000 The inventory isrecorded at the lower of cost and net realisable value. The patenthas a fair value less costs to sell of $20,000. The land andbuildings of ‘Fizzy Drinks’ have a fair value less costs to sell of$620,000, and the land and buildings of ‘Ice creamery’ have a fairvalue less costs to sell of $175,000. On 30 June 2018, thedirectors of Foodie Ltd estimate that the fair value less cost tosell for ‘Fizzy Drinks’ and ‘Ice creamery’ amount to $750,000 and$260,000 respectively. The value in use of ‘Fizzy Drinks’ and ‘Icecreamery’ are estimated at $810,000 and $240,000 respectively.Required: Determine the impairment loss (if any) to be recognisedby Foodie Ltd for each of its cash generating units as at 30 June2018, and determine how the impairment loss (if any) is to beallocated. Prepare the journal entries to account for theimpairment loss/losses (if any). Show all workings and providereferences to the relevant accounting standard to support youranswer. Marking Guide - Question 5 Max. marks awarded Applicationof the impairment test and allocation of impairment losses wherenecessary, with explanations, workings and references 12 Journalentries 4 Rationale back to top This assessment task will assessthe following learning outcome/s: be able to prepare basicfinancial statements for reporting entities. be able to discusscritically and comprehensively the statutory and professionalrequirements upon which published financial statements are based.be able to explain the form and content of financial statements. beable to interpret and apply generally accepted accountingprinciples and specific financial reporting standards relating toconcepts of recognition, measurement, disclosure, revaluation andimpairment of key financial statement elements