You must prepare a Statement of Advice (SoA) that addresses all the questions raised in the letter
Question:
(a) Payout of staff annual leave $450,000.
(b) Redundancy payout $800,000.
(c) For those staff who will be moving to another division, retraining will be required at a cost of $500,000.
(d) As another division is located 200km from the division being closed down, National Ltd agreed to pay for the costs of relocating those employees to another division.
(e) The lease on old factory has five years to run. The cost of terminating the lease is expected to be $300,000.
(f) The financial and management information systems of the division being closed need to be reconfigured to be comparable with another system, so that it can be used in the new division. This is estimated to cost approximately $1 million.
(g) Expected loss due to closing down $979,000. The above costs will be paid during August 2023. We are unsure whether we need to include the above costs in the 2023 annual reports. Please explain any disclosure requirements for such events as at 30 June 2023.
Kaplan Business School Assessment 3 Case Study 2023 Item 3 As you know, we have recently become a listed company, and as a result of this, we issued 1,000,000 ordinary shares to the public for the first time at an issue price of $10. The shares were payable as follows: $5 payable on application (closed on 28 January 2023) $2 payable on allotment (received by 31 March 2023) $3 payable on call made on 15 June 2023 and payable by 30 June 2023 All applicants paid only application money except a holder with 10,000 shares who paid $10 (full share price). On 31 March 2023, we have recorded share capital of $10,000,000 in the book. However, we are unsure whether this amount has been correctly accounted, therefore advice on journal entries will be highly appreciated. In addition, the call money due date was on 30 June and one of shareholders is not able to pay the call money on 4,000 shares he purchased. The prospectus state that shares will be forfeited and refund would be made to those who failed to pay call money. The underwriters informed us that they could sell 4,000 shares at $9 per share with a fee of $2,900. It would be great if you could provide journal entries of the share issue process as examples in your explanations. Yours sincerely, Sullivan Sampson
Advanced Accounting
ISBN: 978-0077431808
10th edition
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik