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

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

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

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 10MC

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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.
Q.1.3 During the previous financial year, a competitor began litigation against Isomin Ltd (4) regarding a dispute over a design. On 10 April 2021, a judge decided that Isomin Ltd should pay the competitor R45 000 without leave to appeal. Isomin Ltd had treated this matter as a contingent liability in the 31 March 2020 financials.
Question 32: What statement about Form l-9 is accurate? Answer: A. O The employee submits one or two documents to verify employment eligibility. В. O It was significantly revised and expanded in 2020. C. O A company submits this to request an EIN. D. O It is also referred to as Publication 15. Question 33: Match each incentive plan to its definition. Profit-sharing Employee receives a portion of the company's profits after exceeding a predetermined level DROP HERE Employee may purchase shares of the business after meeting predetermined goals Stock options DROP HERE Sabbaticals Paid leave after working a predetermined number of years DROP HERE Monies received for reaching a specific sales/production goal Cash incentives DROP HERE Question 34: Rachel is a server at a family restaurant in Omaha, NE. As a tipped employee, she receives an hourly wage that is less than the federal minimum wage. This week, her combined hourly wages and tips was less than the federal minimum wage. What happens…
If the employee benefits remain unpaid, how much liability shall Entity A accrue at the end of the year? A. 400,000 B. 200,000 C. 0 D. 300,000
Q.1.3 During the previous financial year, a competitor began litigation against Isomin Ltd regarding a dispute over a design. On 10 April 2021, a judge decided that Isomin Ltd should pay the competitor R45 000 without leave to appeal. Isomin Ltd had treated this matter as a contingent liability in the 31 March 2020 financials. For each of the events described above, discuss whether an adjusting or non‐adjusting event occurred. In order to get the mark allocated you will need to justify why you believe the event is either an adjusting or non‐adjusting event.Where the events are adjusting, describe the adjustment that must be made as well as the amount and where the events are non‐adjusting, discuss whether any disclosure needs to be made in the notes to the financial statements. Justify your answers.
3. Determine the implication of the following independent cases to the December 31, 2020financial statements as per PAS 37, on Provisions, Contingent Liabilities, and ContingentAssets.Case 1On December 5, 2020, an employee filed a P3,000,000 lawsuit against Lance Company fordamages suffered when one of the company’s equipment malfunctioned in August, 2020.In your inquiry of the company’s legal counsel, the legal counsel expects the company willlose the lawsuit and estimates the losses to be between P500,000 and P1,500,000. Theemployee has offered to settle the lawsuit out of court for P1,200,000, but Lance Companywill not agree to the settlement.Case 2Lance Company has guaranteed a loan of P2,000,000 of one of its key officers from a bankin 2020. By the time the financial statements of Lance Company were approved forissuance by its BOD, it is clear that the key officer is in financial difficulties and it is probablethat Lance Company will meet the guarantee.Case 3On December 20, 2020,…
Section 5-EMPLOYEE DATA: FORM W-4 AND STATE WITHHOLDING 0ALLOWANCE CERTIFICATES How long does a new employee have to submit a completed W-4? How must the employer withhold FIT until the W-4 is received from a new employee? On March 2, 2020, Mischa submits a new W-4. If payday is Friday, what is the date of the first paycheck that must reflect Mischa’s new W-4? On March 23,2020, Paul submits a new W-4. If Paul is paid the last weekday of each month, what is the date of the first paycheck that must reflect Paul’s new W-4? On October 2, 2020, Janet starts a part-time job. She did not owe federal income tax in 2019 and does not expect to earn enough to pay federal income tax for 2020, so she claims exempt from federal income tax withholding on her 2020 Form W-4. Does Janet need to submit a W-4 in 2021? If so, by when—and how does her employer withhold if she does not do this?
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…
Under IAS 19 on Employee Benefits, which of the following terms best describes other long-term employee benefits a. Benefits not falling due wholly within twelve months of the end of the period in which the service is rendered. b. Benefits which are payable after completion of employment c. Benefits payable as a result of an entity's decision to end an employment before the normal retirement care. d. Benefits which fall due within twelve months of the end of the period in which the service is rendered.
Chopin (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…
Perry Peter (pty) Ltd paid the following legal expenses to attorneys for the 2022 year of assessment: R5 450 of the fee was for debt collection. • R25 000 related to the drawing up of a restraint of trade agreement which was paid to an ex-employee. • R25 000 related to a dispute between the company's director and one of the employees due to sexist remarks made by the director. What amount will be deducted in terms of legal expenses when the company is computing their taxable income for the 2022 year of assessment? O A. 30 450 OB. 5 450 O C. 25 000 O D. 55 450 Show Transcribed Text Tasmyn Glad does part-time work in the evenings, capturing the assignment results of students from a local university on a computer. The cost of her computer was R13 500. The expense incurred is not deductible in the determination of the relevant taxpayer's taxable income. Select one: O True O False Show Transcribed Text Syrup Lemon (Pty) Ltd lists of doubtful debts as at 31 March 2022 amounted to R69 000.…
Northwest Company determined that it has an obligation relating to employees' rights to receive compensation for future absences attributable to employees’ services already rendered. The obligation relates to rights that vest, and payment of the compensation is probable. The amounts of Northwest's obligations as of December 31 are reasonably estimated as follows: Vacation pay P110,000 Sick pay 80,000 In its December 31 financial position, what amount should Northwest report as its liability for compensated absences?