Explain to Gotell (Pty) Ltd how the recognition of the liability would differ if Gotell (Pty) Ltd were terminating the employment.
Q: Xing Fu ltd., in preparation of its December 31, 2019, financial statements, is attempting to…
A: Journal entries refers to the systematic documentation of the financial transactions of a company in…
Q: On June 30, 2020, Duts discovered that it had been manufacturing a product illegally since this…
A: Question 3 : On 30.06.2020, Company discovered that product manufacturing are illegal So, company…
Q: A company gives each of its 65 employees (assume they were all employed continuously through 2020…
A: For 2020 = 65 x 12 x 8 x 25 = 156000 For 2021 = 65 * (12+(12-9) * 8 * 28 = = 65 x…
Q: Desmond was appointed director and managing director of Candore Limited. The terms of his service…
A: Answer:-A Shareholders has authority to pass the resolution and remove the Desmond. The entire act…
Q: The EPBO for Branch Industries at the end of 2021 was determined by the actuary to be $20,000 as it…
A: APBO (Accumulated Post-retirement Benefit Obligation) is the proportion of EPBO (Expected…
Q: On January 1, 2020, the entity began a program of granting 2. What is the accrued liability on…
A: Accrued liability is the liability which has been accrued but the company has not been paid yet.…
Q: Mr. B wanted to become a Board of Director, however 8 years ago he was convicted by final judgment…
A: A qualified director can become a board of directors for taking important and relevant decisions for…
Q: Determine the amount of termination benefits and short term employee benefit in accordance with IAS…
A: According to IAS 19 it's is based upon the employee's decision for accepting the offered…
Q: On May 20, 2018 a passenger was injured while disembarking one of the company’saeroplane. This was…
A: Accounting is primarily concerned with identifying, recording, measuring, summarizing transactions…
Q: A business has been involved in a lawsuit that they have lost in court. The judge has ordered money…
A: An annuity is a long-term commitment that an insurance provider issues and is intended to help…
Q: Helen Company's directors decided on November 1, 2011 to restructure the entity's operations as…
A: Restructuring cost provision is provision related with all the direct expenses which are incurred…
Q: The possible outcomes are equally likely. The accounting year ends on December 31 and the 2020…
A: Personal injury lawsuit: In the case of personal injury there is a legal dispute that arises when…
Q: On Dec. 31, 2020, an employee filed a P3,000,000 lawsuit against Siomai Company for damages suffered…
A: The journal will be prepared by the company's management, and it will be taken as input for…
Q: On December 15, 2023, an employee filed a lawsuit against Bojack Company fo amages suffered when one…
A: In this Question, we have to find out the provision that should be recognized by the company. As…
Q: On February 5, 2021, an employee filed a P2,000,000 lawsuit against ABC Company for damages suffered…
A: Liabilities are the obligations or dues that needs to be paid out or settled by the business. It can…
Q: 2020 • Fourteen employees leave. The entity estimates that a further twenty-eight will leave during…
A: Given: - Total employee= 200 Employee leave in 2020= 15 Fair Value= 30
Q: In September Manson Paint Corporation began operations in a state that requires new employers of one…
A:
Q: A business has been involved in a lawsuit that they have lost in court. The judge has ordered money…
A: Semi annual payment (A)=$14,000 Duration (n)=15*2=30 periods Rate of interest per period (i)…
Q: On February 5, 2020, an employee filed a P2,000,000 lawsuit against XYZ Company for damages suffered…
A: Accrued liability represents an expense that is not paid or does not log under accounts payable of…
Q: A business has been involved in a lawsuit that they have lost in court. The judge has ordered money…
A: Present Value of Annuity due will be used to calculate the present value of annual payments to the…
Q: Tender Foot, Inc., is involved in litigation regarding a faulty product sold in a prior year. The…
A: A contingent liability refers to the liabilities that may be incurred depending upon the occurrence…
Q: Kenneth is the Chief Executive Officer of Alpha Ltd. He was provided with a flat in Repulse Bay by…
A: Fringe benefit: Fringe benefits can be defined as the benefits provided by the company to the…
Q: Constant Company is being sued for P4, 000,000 for an injury caused to a child as a result of…
A: A provision is recognised when all of the following criteria are met: A past event gives rise to a…
Q: C. An entity is committed to close a factory in 10 months and shall terminate the employment of all…
A: As per accounting standard IFRS 9, additional amount paid to employees who provides services until…
Q: ABC Company determined that it has an obligation relating to employees’ rights to receive salaries…
A: In the given question the payment of future absences are probable so the company should be reported…
Q: Beautiful Company is involved in litigation regarding a faulty product sold in a prior year during…
A: Contingent Liability. Contingent liabilities are those, the occurance of which depend on the happing…
Q: At the beginning of current year, Zamba Company announced the decision to close the factory located…
A: 12. Total benefit under the termination plan = (Total employee - No. of employees retain) x P20,000…
Q: Mr. H retired from his job after 20 years of service. He joined the company at the age of 21 and was…
A: Section 32(B)(6)(a) of the Tax Code read with Revenue Memorandum Circular (RMC) 120-2020 provides…
Q: klar, CPA, purchased from Wiz Corp. two computers. Sklar discovered material defects in the…
A: answer c : lose because the clause providing that the statute of limitation should be limited to…
Q: On January 5. 2022. a company received a P5,000,000-complaint from one of its employees who suffered…
A: Solution Explanation- Contingent liability is a liability or a potential loss that mau occur in…
Q: On May 1, 2010, Jollibee Inc., a franchisor, entered into a franchise agreement with Session…
A: Deferred revenue can be defined as the prepayment that is made by the customers for goods or…
Q: Apple plc is a manufacturing company and its year close at 31 December. On October 2020, Apple plc…
A: Meaning of Provision :- A provision is a liability of uncertain timing or amount. The liability may…
Q: GoodMates Pty Ltd loaned one of its staff, Munir, the amount of $5,000 (interest free) for one…
A: Fringe benefits are described as those payments which are made by the employer to the employee in…
Q: On 15 January, 20X8, the company settled and paid a personal injury claim of a former employee as…
A: Adjusting events are those events that provide further evidence of the conditions that existed at…
Q: On January 5, 2022, a company received a P5,000,000-complaint from one of its employees who suffered…
A: As per the provisions of standard accounting principles, the contingent…
Q: ABC Company determined that it has an obligation relating to employees' rights to re salaries for…
A: Compensated absences are the absences for whih employees are being paid even though employees are on…
Q: sued by Dulcinea, Inc. for $1,000,000. Mojito’s attorneys believe that it is probable that the…
A: A contingent liability is a potential responsibility that may develop in the future, such as pending…
Q: Employee has worked for Employers incorporated business for several years at a salary of 80K per…
A: The employee has an annual income of $80,000 for next two years. For the next two years, the…
Q: In September, Amina hired Bryan as a delivery man. Bryan was to commence work on 1 November. On 1…
A: A layoff is a termination of employment at the will of the employer. It may be temporary or…
Q: a. Prepare the journal entries that should be recorded as of December 31, 2020, to recognize each…
A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…
Q: The total income subject to withholding tax is _____.
A: Income tax is the tax which is levied by the tax authority on the net income of the firms. The…
Q: a. Net FUTA tax b. SUTA tax
A:
Q: Century-Fox Corporation’s employees are eligible for postretirement health care benefits after both…
A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: On January 1, 2020, Lesley Benjamin signed an agreement, covering 5 years, to operate as a…
A: Refer annuity table for Ordinary annuity for 5 years at 11% (3.6959)
Q: On January 5, 2022, a company received a P5,000,000-complaint from one of its employees who suffered…
A:
Q: Entity A has 20 employees who are each entitled to one day paid vacation leave for each month of…
A: Vacation leave can be either paid or unpaid. If these vacation leave or other kind of leave (such as…
Q: ABC Company determined that it has an obligation relating to employees’ rights to receive salaries…
A: GIVEN ABC Company determined that it has an obligation relating to employees’ rights to receive…
Gotell (Pty) Ltd embarked on a retrenchment programme. The company made an offer to 10 employees over the age of 55 years for voluntary termination. Advise Gotell (Pty) Ltd of the implications that this offer has regarding the recognition of a liability in their books of account. Explain to Gotell (Pty) Ltd how the recognition of the liability would differ if Gotell (Pty) Ltd were terminating the employment.
Step by step
Solved in 2 steps
- In August 2021, a company's worker was injured in the factory in an accident partially the result of his own negligence. The worker has sued the company for P800,000. The company's counsel believes it is possible but not probable that the outcome of the suit will be unfavorable, and that the settlement would cost the company from P250,000 to P500,000. At year-end, the company should A. disclose the existence of a contingent liability with a range of P250,000 to P500.000. B. disclose the existence of a contingent liability for P375,000. C. record a liability of P375.000. D. do nothing. A suit for breach of contract seeking damages of P2,400,000 was filed by an author against a company on October 4, 2021. The company's legal counsel believed that an unfavorable outcome is probable. A reasonable estimate of the award to the plaintiff is between P600,000 and P1,800,000. No amount within this range is a better estimate of potential damages than any other amount. At yearend, the company…Some years ago, Junior Ltd established a defined benefit pension plan for its employees. The company has since introduced a defined contribution plan, which all new staff join when commencing employment with Junior Ltd. Although the defined benefit plan is now closed to new recruits, the fund continues to provide for employees who have been with the company for a long time. The following actuarial report has been received for the defined benefit plan: Requirements:a) Determine the surplus or deficit of Junior Ltd.’s defined benefit plan at 31 December 2018.b) Determine the net defined benefit asset or liability that should be recognised by Maple Ltd at 31 December 2018.c) Calculate the net interest and the return on plan assets for 2018.As part of a restructuring plan, Patagonia informs 100 of its employees that they will be laid off and given cash as part of a severance plan. No additional work is required of employees to receive the cash payment. Assuming Patagonia follows U.S. GAAP, Patagonia should record its obligation to make these payments: Group of answer choices After the employees are laid off Never since this is a restructuring plan Immediately after communicating the plan to employees When the cash payments are made
- 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?Chopin (Pty) Ltd ordinarily pays their employees a bonus in the form of a thirteenth chequetogether with their December pay. This has created a constructive obligation on their part torecognise the liability. Chopin (Pty) Ltd only pays the bonus if the employee is still working for thecompany on 31 December of each year. Any employees joining the company during the year arepaid a pro‐rata (proportional) amount of their bonus.On 1 January 2020 there were 32 employees in total earning an average monthly salary ofR21 300 each. During the year, two new employees were taken on, one on 1 May 2020 at a salaryof R15 700 per month, and the other on 1 November 2020 earning R10 500 per month. Two of theoriginal employees resigned on 31 May 2020, their last day of employment being on 30 June 2020.Required:Q.2.1.1 Calculate the value of the provision that Chopin (Pty) Ltd should recognise on 1 January 2020. Prepare the journal entry. No narration is necessary. Q.2.1.2 What will the carrying value…One of Rose’s suppliers, Powder Bhd, had adverse publicity due to the issue of cleanliness of its factory. On 1 September 2019, Rose Bhd decided to terminate the contract with Powder Bhd. The contract will expire in 8 months time. According to the contract, the cost to fulfill the contract is RM160,000 per month. It is also stipulated in the contract that Powder Bhd can accept a compensation of RM1,400,000 if the contract is terminated more than 6 months before it expires. Required:For each of the events above, explain whether provisions should be recognised in accordance with MFRS 137 Provisions, Contingent Liabilities and Contingent Assets.
- Mary Ribukh was hired as a staff auditor of LGY and Company in 2005. In December 2012, he transferred to Quilava and Associates. In 2014, he returned back to LGY and Company until his retirement in 2020 at the age of 55. Question 1: Are the retirement benefits taxable to Anton? Question 2: Suppose he was terminated from employment due to dishonesty. Is the separation pay taxable to Anton? Question 3: Suppose he was terminated from employment due to the merger of the two audit firms Will the separation pay be taxable to Anton? Yes, Yes, Yes No, Yes No No Yes, Yes Yes, No, NoChopin (Pty) Ltd ordinarily pays their employees a bonus in the form of a thirteenth cheque together with their December pay. This has created a constructive obligation on their part to recognise the liability. Chopin (Pty) Ltd only pays the bonus if the employee is still working for the company on 31 December of each year. Any employees joining the company during the year are paid a pro‐rata (proportional) amount of their bonus. On 1 January 2020 there were 32 employees in total earning an average monthly salary of R21 300 each. During the year, two new employees were taken on, one on 1 May 2020 at a salary of R15 700 per month, and the other on 1 November 2020 earning R10 500 per month. Two of the original employees resigned on 31 May 2020, their last day of employment being on 30 June 2020. What will the carrying value of the liability be on 30 June 2020? Show your calculations and prepare the journal entry to recognise the adjustment from the 1 January balance. No narration is…William Schmalz entered into an employment contract with Hardy Salt Company. The contract granted Schmalz six months’ severance pay for involuntary termination but none for voluntary separation or termination for cause. Schmalz was asked to resign from his employment. He was informed that if he did not resign, he would be fired for alleged misconduct. When Schmalz turned in his letter of resignation, he signed a release prohibiting him from suing his former employer as a consequence of his employment. Schmalz consulted an attorney before signing the release and upon signing it received $4,583.00 (one month’s salary) in consideration. Schmalz now sues his former employer for the severance pay, claiming that he signed the release under duress. Is Schmalz correct in his assertion?
- Norma Smith is the controller of Baylor Corporation and is responsible for the preparation of the year-end financial statements. The following transactions occurred during the year. a. On December 20, 2020, a former employee filed a legal action against Baylor for $100,000 for wrongful dismissal. Management believes the action to be frivolous and without merit. The likelihood of payment to the employee is remote. b. Bonuses to key employees based on net income for 2020 are estimated to be $150,000. c. On December 1, 2020, the company borrowed $600,000 at 8% per year. Interest is paid quarterly. d. Accounts receivable at December 31, 2020, is $10,000,000. An aging analysis indicates that Baylor’s expense provision for doubtful accounts is estimated to be 3% of the receivables balance. e. On December 15, 2020, the company declared a $2.00 per share dividend on the 40,000 shares of common stock outstanding, to be paid on January 5, 2021. f. During the year, customer…Due to COVID-19, Angel Corp. incurred huge losses. In order to continue its business operation, the company decided to reduce its employees by creating a redundancy program in accordance with the labor laws. It offered each employees triple the amount of their separation pay. Michael, one of the employees of Angel Corp accepted the offer of the company. After several months, the company is still experiencing huge losses, thus it filed a bankruptcy. John, one of the employees of Angel Corporation, was terminated by the company as a result of its bankruptcy. He received his separation pay in accordance with the labor laws. The separation pay received by John is considered as: Group of answer choices b. Exclusions from Gross Income e. None of the Above a. Inclusions in / Items of Gross Income c. Capital gains subject to capital gains tax d. Passive income subject to final taxDr. John Holm signed a two-year employment agreement with Gateway Anesthesia Associates, PLLC. During negotiations for the agreement, Gateway’s president, Dr. Jon Nottingham, told Holm that on comple-tion of the contract he would become a partner in the firm and that during the term he would be paid “like a partner.” The written agreement did not reflect this promise—the con-tract read that Holm would be paid based on “net collections” for his services and did not state that he would become a part-ner. Later, Gateway told Holm that it did not intend to make him a partner. Holm filed a complaint in an Arizona state court against Gateway, alleging breach. Before the trial, Holm filed a motion to reform the contract to express what he had been told. Nottingham did not dispute Holm’s account. What is the basis for the reformation of a contract? Is it appropri-ate in this case? Why or why not?