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PART 2: CALCULATION/PRACTICAL QUESTIONS Q1. RECOVERABLE AMOUNT Ipu Wens Construction LTD was forced to sell its trucks after a year due to the termination of contruct via Mendi-Tambul road. Ipu Wens Construction LTD had been using a 20 year, straight line depreciation method for these vehicles. The net book value before discovering this impairment in value was K1,000,000. The vehicle's manufacturer found a buyer that was will to pay K500,000 for Ipu Wens Construction LTD trucks . Ipu Wens Construction LTD was also required to pay K50, 000 to have the trucks transported to this new owner. Required: 1. Calculation (10 mrks) 2. What was the: a) Depreciated amount after a year? (2mrks) b) Fair Value? (2mrks) c) Cost of Disposal? (2mrks) d) Carrying Amount? (2mrks) e) Impairment? (2mrks) 3. What is the RECOVERABLE AMOUNT? 4. Journal Entry (5marks)
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