Determine the amount of termination benefits and short term employee benefit in accordance with IAS 19 ?

There was an explosion at the plant on December 23, 2021 with damages estimated at $1,385,000. The company has insurance to cover such incidents totaling $5,000,000 if the incident was an accident and $1,000,000 if it was due to company error. The incident was investigated and the explosion found to be due to a faulty gas tank that was last serviced on July 15, 2021. The company policy was to service every 6 months however industry standards was generally 3 months. Management was advised by legal counsel that there was a high probability the company would be held responsible for the damages. Employees were not injured during the incident however the employees’ union has indicated that there are discussions underway relating to filing a $3,000,000 claim for unsafe working conditions.   Prepare the journal entries necessary to record the transactions above using appropriate dates. ii.Prepare the adjusting entries necessary at December 31, 2021 in order to properly report interest expense…

Wildhorse Limited, a public company following IFRS, decided to upgrade the coffee machines in all of its office locations. Wildhorse leased 45 machines from Coffee Tyme Ltd. on July 1, 2023. (To purchase the coffee machines instead would have cost Wildhorse $315 per machine, and the machines would have lasted an estimated five years.) The lease calls for semi-annual payments for the next three years, in the amount of $30 per machine. The payments start on July 1, 2023. At the end of the three-year period, the machines will have to be returned to the lessor. Prepare the entry for the first payment on July 1, 2023. (List debit entry before credit entry. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit July 1 Would the entry for the first payment differ if Wildhorse followed ASPE? The entry ☑…

An international company appoints a 30-year Harvard MBA as its new president on a 5-year contract at a salary of Php 4,500,000. The salary is to increase each year by 9%. On the first day of the job, a serious past misconduct is discovered about the incumbent. The board of directors therefore decides to fire him the same day. However, as stipulated in the employment contract, he must be paid the present value of the salaries along with a golden handshake in the sum of Php 5,000,000. If ? = 10%, how much is he paid?

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

Apple plc is a manufacturing company and its year close at 31 December. On October 2020, Apple plc was notified that: i. An ex-employee had started court proceedings against them for unfair dismissal. Legal advice was that there was an 80% chance that Apple plc would lose the case and would need to pay an estimated £1m on 31 December 2021. Apple plc has a cost of capital of 10% per annum. Furthermore, Apple plc has the following legal claims outstanding: ii. A legal action against Apple plc Ltd claiming compensation for £ 200,000, filed in September 2020. Its lawyer advised that it is probable that the liability will materialize. iii. A legal action taken in November 2020 by Apple plc against another entity claiming damages of £ 300,000. Its lawyer informed that there is a good probability that it will win the case. Required: a. With reference to IAS 37, explain how issues i., ii. and iii. should be dealt within the financial statements as on 31 December 2020. b. Outline how an…

Cerise Ltd (Cerise) has a year end of 30 April 2021. The company begandeveloping a project on 1 May 2020, incurring total development costs up to the year end of £270,000 which were incurred evenly throughout the year. Cerise also incurred a one-off training expense for its employees to learn how to use the new product, costing £12,000 on 13 March 2021. This was incurred in addition to the £270,000 development costs.The relevant criteria for capitalisation according to IAS 38 Intangible Assetshave been met by project Magenta from 1 January 2021. How much would be eligible for capitalisation for this project for the year ended 30 April 2021?a) £270,000b) £78,000c) £90,000d) £102,000 Which option is correct and why

Gordon Inc., a private company that follows ASPE, entered into a lease agreement with Canada Leasing Corporation to lease a warehouse for six years.  Annual lease payments are $21,000, payable at the beginning of each lease year.  Gordon Inc. signed the lease agreement on January 1, 2021, and made the first payment on that date. At the end of the lease, the machine will revert back to Canada Leasing Corporation.  The normal useful life of the warehouse is 10 years.  At the time of the lease, the warehouse could be purchased for $108,000.  Gordon does not know the implicit rate of the lease; Gordon's incremental borrowing rate is 10%.  Gordon uses straight-line depreciation for this type of asset. Required: Using the three criteria under ASPE, prove whether this is an operating or capital lease. Prepare a lease amortization schedule for the lease.  Round all amounts to the nearest dollar. Prepare the journal entries for 2021 and 2022 for Gordon Inc.  Round amounts to the nearest…

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 3O, 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 27 January 2021, Johnson Engineering Ltd signed a contract to supply a new machine to Yummy Confectionary Ltd for $92,000 (including GST). This includes $75,000 for the machine (excluding GST), $2,000 for delivering and installing the machine (excluding GST) and $3,000 for servicing the machine in 6 months. Johnson Engineering Ltd delivers and installs the machine on 12 February 2021. An invoice for $92,000 is also given to Yummy Confectionary Ltd on this day. Yummy Confectionary Ltd transfers $92,000 to Johnson Engineering Ltd on 21 February 2021 via internet banking. Johnson Engineering Ltd services the machine on 12 August 2021.   Required: Prepare journal entries for invoicing of the contract on 12 February 2021 and the servicing of the machine on 12 August 2021.   Johnson Engineering Ltd’s General Journal: Date Account Names Debit Credit 12/2/2021                                 (To record the invoice for contract with…