Honky Ltd Acquired All the Issued Share Capital of Cat

Multiple Choice

Honky Ltd acquired all the issued share capital of Cat Ltd on 1 July 20X0.Goodwill acquired was $1 000 000 and Honky Ltd tests this goodwill for impairment every year.As at July 1 20X5 $500 000 or the original goodwill had been recorded as impaired.For the year ended June 30 20X6 a further $100 000 was regarded as being impaired.What is the elimination journal entry accounting for the impairment of this goodwill in Honky Ltd's consolidated financial statements for the year ended 30 June 20X6?

A) $\begin{array} { l l c } \text { Accounts } & \text { Debit } \$ & \text { Credit \$ } \\\text { Goodwill impairment expense } & 100000 & \\\text { Retained profits } & 600000 & \\\text { Accumulated goodwill impairment } & & 700000\end{array}$
B) $\begin{array}{lcc}\text { Accounts } & \text { Debit \$ } & \text { Credit \$ } \\\text { Goodwill amortisation expense } & 100000 & \\\text { Goodwill } & & 100000\end{array}$

C) $\begin{array} { l c c } \text { Accounts } & \text { Debit \$ } & \text { Credit \$ } \\\text { Goodwill impairment expense } & 100000 & \\\text { Retained profits } & 500000 & \\\text { Accumulated goodwill impairment } & & 600000\end{array}$
D) $\begin{array}{lcc}\text { Accounts } & \text { Debit \$ } & \text { Credit \$ } \\\text { Goodwill amortisation expense } & 100000 & \\\text { Goodwill } & & 100000\end{array}$