- "Accounting Issues: Calculating Impairment Loss for Juice Jets

School: Langara College - Course: ACCOUNTING CORE1 - Subject: Accounting

Exhibit 1 Purpose: To present supporting calculation for accounting issues 1. Juice Jets Recoverable amount is the higher of: Fair value-cost of disposa$ 250,000 Value in use$378,100 ( note 1)Note 1 Carrying amount$400,000 n5 Impairment loss($21,900)Salvage value$ 90,000 Cash flow$85,000 i0.1 Conclusion: Impairment loss of $21,900 should be recorded. 2. Lease The lease payments to include in the lease liability are: Fixed payments: Payments are $22,000 annually, payable at the beginning of the period. Variable payments: There are none. Bargain purchase option: The BPO option to purchase the items at fair market value and JJI do n Guaranteed residual payment: There is none. Non-lease component costs: There are none. Lease liabilityStraight-line methodInterest expens n6PV$105,397 Lease liability i0.1n6Lease pmt Pmt22000Depreciation$17,566 FV0interest rate PV($105,397)Interest expens Conclusion: lease liability, depreciation expense and interest expense should be recorded in the

not have intention to exercise. We will consider this element as none. The penalty $20000 if the se at beginning of year $105,397 $ (22,000) $83,397 0.1 $8,340 e amount as calculated in this exhibit.