D. At the beginning of current year, Zamba Company announced the decision to close the factory located in Zamboanga and terminate all 150 employees as a result of economic downturn. The entity shall pay P30,000 per employee upon termination. However, to ensure that the windup of the factory occurs smoothly and all remaining customer orders are completed, the entity needs to retain some employees until closure of the factory in nine months. As a result, the entity announced that employees who agree to stay until the closing of the factory shall receive P80,000 payment at the end of nine months in addition to receiving their current wage throughout the period of closure instead of the P30,000.

D. At the beginning of current year, Zamba Company announced the decision to close the factory located in Zamboanga and terminate all 150 employees as a result of economic downturn. The entity shall pay P30,000 per employee upon termination. However, to ensure that the windup of the factory occurs smoothly and all remaining customer orders are completed, the entity needs to retain some employees until closure of the factory in nine months. As a result, the entity announced that employees who agree to stay until the closing of the factory shall receive P80,000 payment at the end of nine months in addition to receiving their current wage throughout the period of closure instead of the P30,000.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 4MC

See similar textbooks

Similar questions

D. At the beginning of current year, Zamba Company announced the decision to close the factory located in Zamboanga and terminate all 150 employees as a result of economic downturn. The entity shall pay P30,000 per employee upon termination. However, to ensure that the windup of the factory occurs smoothly and all remaining customer orders are completed, the entity needs to retain some employees until closure of the factory in nine months. As a result, the entity announced that employees who agree to stay until the closing of the factory shall receive P80,000 payment at the end of nine months in addition to receiving their current wage throughout the period of closure instead of the P30,000. Based on this offer, the entity expected to retain 20 employees until the factory is closed. REQUIRED: Compute the total benefit under the termination plan, the amount of termination benefit and the amount of short-term benefit.
At the beginning of current year, Zamba Company announced the decision to close the factory located inZamboanga and terminate all 150 employees as a result of economic downturn.The entity shall pay P30,000 per employee upon termination.However, to ensure that the windup of the factory occurs smoothly and all remaining customer orders arecompleted, the entity needs to retain some employees until closure of the factory in nine months.As a result, the entity announced that employees who agree to stay until the closing of the factory shallreceive P80,000 payment at the end of nine months in addition to receiving their current wage throughoutthe period of closure instead of the P30,000.Based on this offer, the entity expected to retain 20 employees until the factory is closed.REQUIRED:12. Compute the total benefit under the termination plan.13. Compute the amount of termination benefit.14. Compute the amount of short-term benefit.
An entity is committed to close a factory in 10 months and shall terminate the employment of all the remaining employees of the factory. Under the termination plan, an employee leaving before closure of factory shall receive on termination date a cash payment of P20,000. However, an employee that renders service until closure of the factory shall receive P60,000. There are 120 employees at the factory. The entity expects 100 employees to leave before closure and 20 employees to render service until closure. REQuIRED: What amount should be recognized as termination benefit and amount should be recognized as short-term benefit?
C. An entity is committed to close a factory in 10 months and shall terminate the employment of all theremaining employees of the factory. Under the termination plan, an employee leaving before closure offactory shall receive on termination date a cash payment of P20,000. However, an employee that rendersservice until closure of the factory shall receive P60,000. There are 120 employees at the factory. The entityexpects 100 employees to leave before closure and 20 employees to render service until closure. REQUIRED:11. What amount should be recognized as short-term benefit?
C. An entity is committed to close a factory in 10 months and shall terminate the employment of all theremaining employees of the factory. Under the termination plan, an employee leaving before closure offactory shall receive on termination date a cash payment of P20,000. However, an employee that rendersservice until closure of the factory shall receive P60,000. There are 120 employees at the factory. The entityexpects 100 employees to leave before closure and 20 employees to render service until closure. REQUIRED:10. What amount should be recognized as termination benefit?
Due to recent acquisition, Adaro Co Ltd plans to close a factory in 10 months and, at that time, terminate employment of all of the remaining employees at the factory. Because Adaro Co Ltd needs the expertise of the employees at the factory to complete some contracts, it announce a plan of termination as follows. Each employee who stand and renders service until the closure of the factory will receive on the termination date a cash payment of CU 50,000, employees leaving before the closure of the factory will receive CU 20,000.There are 1,200 employees at the factory . At the time of the announcing the plan, Adaro Co Ltd expects 200 of them to leave before the closureRequired :Determine the amount of termination benefits and short term employee benefit in accordance with IAS 19 ?
As a result of a recent acquisition, PT ABC plans to close a factory in 10 months and, at that time, terminate employment of all of the remaining employees at the factory. Because PT ABC needs the expertise of the employees at the factory to complete some contracts, it announce a plan of termination as follows. Each employee who stand and renders service until the closure of the factory will receive on the termination date a cash payment of $50,000, employees leaving before the closure of the factory will receive $ 20,000. There are 1,200 employees at the factory . At the time of the announcing the plan, PT ABC expects 200 of them to leave before the closure Required :Determine the amount of termination benefits and short term employee benefit in accordance with IAS 19 Employee Benefits?
16. Helen Company's directors decided on November 1, 2011 to restructure the entity's operations as follows: Factory A would be closed down and put on the market for sale. Employees working in Factory A would be retrenched on November 30, 2011, and would be paid their accumulated entitlements plus six months' wages. Some employees working in Factory A would be transferred to Factory B, which would continue operating. On December 31, 2011, the following transactions and events had occurred: The retrenched employees have left and their accumulated entitlements have been paid. However, an amount of P1,000,000, representing a portion of the six months' wages for the retrenched employees, has still not been paid. Costs of P300,000 are expected to be incurred in transferring the remaining employees to their new work in Factory B. The transfer is planned for January 15, 2012. One employee, Juan Cruz, remains in order to complete administrative tasks relating to the closure of Factory A and…
On January 1, 2020, Beyonce Inc. announced the decision to close its branch located in North Luzon and terminate all 200 employees in that branch. Beyonce will pay P20,000 per employee as a result of the termination.Nevertheless, the company needs to retain at least 20% of the branch’s employees until its closure in eight months. This is to ensure that the closing will wind-up as planned. Retained employees for the next eight months shall receive a P60,000 payment at the end of the eight months instead of the P20,000. Beyonce finally decided to retain 50 employees until the branch is closed in eight months.How much should be recognized as termination benefit? a. 3,000,000 b. 4,000,000 c. 2,000,000 d. 6,000,000
In November 20X2, an entity contracts with a customer to refurbish a 3-storey building and install new elevators for a total consideration of ₱5,000,000. The promised refurbishment service, including the installation of elevators, is a single performance obligation satisfied over time. Total expected costs are ₱4,000,000, including ₱1,500,000 for the elevators. The entity determines that it acts as a principal because it obtains control of the elevators before they are transferred to the customer. A summary of the transaction price and expected costs is as follows: Transaction price ₱5,000,000 Expected costs: Elevators ₱1,500,000 Other costs 2,500,000 Total expected costs ₱4,000,000 The entity uses an input method based on costs incurred to measure its…
Company T’s directors decided on 3 May 2014 to restructure the company’s operations as follows: Factory Z would be closed down and put on the market for sale. 100 employees working in factory Z would be retrenched on 31 May 2014, and would be paid their accumulated entitlements plus 3 months’ wages. The remaining 20 employees working in factory Z would be transferred to factory X, which would continue operating. Five head-office staff would be retrenched on 30 June 2014, and would be paid their accumulated entitlements plus 3 months’ wages. As at the end of Company T’s reporting period, 30 June 2014, the following transactions and events had occurred: Factory Z was shut down on 31 May 2014. An offer of $4 million had been received for factory Z but there was no binding sales agreement. The 100 retrenched employees had left and their accumulated entitlements had been paid. However, an amount of $76 000, representing a portion of the 3 months’ wages for the retrenched employees,…
Company S’s directors decided on 3 May 2014 to restructure the company’s operations as follows: • Factory Z would be closed down and put on the market for sale. • 100 employees working in factory Z would be retrenched on 31 May 2014, and would be paid their accumulated entitlements plus 3 months’ wages. • The remaining 20 employees working in factory Z would be transferred to factory X, which would continue operating. • Five head-office staff would be retrenched on 30 June 2014, and would be paid their accumulated entitlements plus 3 months’ wages. As at the end of Company S’s reporting period, 30 June 2014, the following transactions and events had occurred: • Factory Z was shut down on 31 May 2014. An offer of $4 million had been received for factory Z but there was no binding sales agreement. • The 100 retrenched employees had left, and their accumulated entitlements had been paid. However, an amount of $76 000, representing a portion of the 3 months’ wages for the retrenched…