Jen-King Companys board of directors approved and communicated an employee severance plan in response to a decline

Question:

Jen-King Company’s board of directors approved and communicated an employee severance plan in response to a decline in demand for the company’s products. The plan called for the elimination of 150 headquarters positions by providing a severance equal to 5% of the annual salary multiplied by the number of years of service. The average annual salary of the eliminated positions is $60,000. The average tenure of terminated employees is eight years. The plan was communicated to employees on November 1, 2007. Actual termination notices will be distributed over the period between December 1, 2007, and April 1, 2008. On December 15, 2007, 40 employees received a lay-off notice and were terminated with severance.
a. Provide the journal entry for the restructuring charge on November 1, 2007.
b. Provide the entry for the severance payment on December 15, 2007, assuming that the actual tenure and salary of terminated employees were consistent with the overall average.
c. Provide the and note disclosures on December 31, 2007.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...