Chopin (Pty) Ltd ordinarily pays their employees a bonus in the form of a thirteenth cheque...
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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. Required: 1 Calculate the value of the provision that Chopin (Pty) Ltd should recognise on 1 lanuary 2020. Prepare the journal entry. No narration is necessary. Show all your workings. Round to the nearest Rand value. 1.2 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 necessary. Show all your workings. Round all amounts to the nearest Rand. Your answer must comply with the requirements of International Financial Reporting Standards (IFRS), in particular IAS19 - Employee benefits. 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. 2. 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. Required: 1 Calculate the value of the provision that Chopin (Pty) Ltd should recognise on 1 lanuary 2020. Prepare the journal entry. No narration is necessary. Show all your workings. Round to the nearest Rand value. 1.2 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 necessary. Show all your workings. Round all amounts to the nearest Rand. Your answer must comply with the requirements of International Financial Reporting Standards (IFRS), in particular IAS19 - Employee benefits. 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. 2.
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Data Modeling and Database Design
ISBN: 978-1285085258
2nd edition
Authors: Narayan S. Umanath, Richard W. Scammel
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