On 31 December 2014 Millwood Ltd's Balance Sheet Shows Motor

Multiple Choice

On 31 December 2014 Millwood Ltd's balance sheet shows motor vehicles at a cost price of $200 000 less accumulated depreciation $50 000. Millwood Ltd uses the cost model to value its assets. On 31 December 2014 an estimate is made that the recoverable amount of the vehicles is $120 000. Under IAS 36/AASB 136 the accounting entry to record the write down of the motor vehicles to recoverable amount is which of the following?

A) Dr Impairment loss on motor vehicles (expense) $80 000; Cr accumulated depreciation $80 000
B) Dr Impairment loss on motor vehicles (expense) $30 000; Cr accumulated depreciation and impairment losses $30 000
C) Dr Impairment loss on motor vehicles (expense) $30 000; Cr motor vehicles $30 000
D) No entry is required