During 2020, SBD closed facilities which were made redundant by the acquisition of Niscayah. Assume that they recognized a charge of $125 associated with closures during 2020 of which $50 was for severance and other benefits to be paid to employees during 2021 and 2022 (the employees were terminated in 2020) and $75 million was for impairment of the property, plant and equipment. $40 of the severance was paid in 2021, with the remainder to be paid in 2022. What journal entries would SBD have recorded in 2020 and 2021?
During 2020, SBD closed facilities which were made redundant by the acquisition of Niscayah. Assume that they recognized a charge of $125 associated with closures during 2020 of which $50 was for severance and other benefits to be paid to employees during 2021 and 2022 (the employees were terminated in 2020) and $75 million was for impairment of the property, plant and equipment. $40 of the severance was paid in 2021, with the remainder to be paid in 2022. What journal entries would SBD have recorded in 2020 and 2021?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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During 2020, SBD closed facilities which were made redundant by the acquisition of Niscayah. Assume that they recognized a charge of $125 associated with closures during 2020 of which $50 was for severance and other benefits to be paid to employees during 2021 and 2022 (the employees were terminated in 2020) and $75 million was for impairment of the property, plant and equipment. $40 of the severance was paid in 2021, with the remainder to be paid in 2022. What journal entries would SBD have recorded in 2020 and 2021?
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