19. The board of directors of Chestnut Inc. approved a restructuring plan on November 1, Year 1. On December 1, Year 1, Chestnutpublicly announced its plan to close a manufacturing division in New Jersey and move it to China and the company's New Jerseyemployees were notified that their jobs would be eliminated. Also on December 1, Year 1, to ensure an orderly transition,management promised a termination bonus of $10,000 to any employee who remains with the company until his or her positionis terminated in the fourth quarter of Year 2. Chestnut estimates it will pay termination bonuses to 120 employees atPage 203the end of Year 2, for a total of $1,200,000. The present value of the estimated termination bonus is $1,000,000.Required:Determine the provision that should be recognized for Chestnut's restructuring plan. Identify the dates on whichjournal entries should be made and the amounts to be recorded.

Corporate Restructructuring: A corporate restructuring is an activity performed by a company to…

Answered: 19. The board of directors of Chestnut…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Flounder, Inc. is a furniture manufacturing company with 50 employees. Recently, after a long negotiation with the local labor union, the company decided to initiate a pension plan as a part of its compensation plan. The plan will start on January 1, 2020. Each employee covered by the plan is entitled to a pension payment each year after retirement. As required by accounting standards, the controller of the company needs to report the pension obligation (liability). On the basis of a discussion with the supervisor of the Personnel Department and an actuary from an insurance company, the controller develops the following information related to the pension plan. Average length of time to retirement Expected life duration after retirement Total pension payment expected each year after retirement for all employees. Payment made at the end of the year. 15 years 11 years $811.400 per year The interest rate to be used is 8%. Click here to view factor tables On the basis of the information…
The Chief Financial Officer of Company X decides to purchase 1000 units of a key component for the company’s core Widget line for $1.0 million in cash. The purchase is recorded as the final entry at the close of business on the last working day of Fiscal Year 2019. As a result.... The Gross Margin declines. The Payables Turnover ratio increases. The Return on Equity increases. The Cash Flow Margin declines.
On January 1, 2020, Xiamen Company made amendments to its defined benefit pension plan that resulted in 61,400 yuan of past service cost. The plan has 5,280 active employees with an average expected remaining working life of 10 years. There currently are no retirees under the plan. SE Assume that Xiamen Company is a foreign company using IFRS and is owned by a company using US GAAP Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes. Required: a. Prepare journal entries for the past service cost for the years ending December 31, 2020, and December 31, 2021, under (1) IFRS and (2) U.S. GAAP. b. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2020, and December 31, 2021, conversion worksheets to convert IFRS balances to U.S. GAAP
Company T’s directors decided on 3 May 2014 to restructure the company’soperations 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 tofactory X, which would continue operating.• Five head-office staff would be retrenched on 30 June 2014, and would bepaid their accumulated entitlements plus 3 months’ wages.As at the end of Company T’s reporting period, 30 June 2014, the followingtransactions and events had occurred:• Factory Z was shut down on 31 May 2014. An offer of $4 million had beenreceived for factory Z but there was no binding sales agreement.• The 100 retrenched employees had left and their accumulatedentitlements had been paid. However, an amount of $76 000, representinga portion of the 3 months’ wages for the retrenched employees, had…
102. Subject :- Accounting

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