1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
pantera1 [17]
3 years ago
12

The board of directors of Chestnut Inc. approved a restructuring plan on November 1, Year 1. On December 1, Year 1, Chestnut pub

licly announced its plan to close a manufacturing division in New Jersey and move it to China, and the company's New Jersey employees 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 position is terminated in the fourth quarter of Year 2. Chestnut estimates it will pay termination bonuses to 120 employees at the 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 which journal entries should be made and the amounts to be recorded.
Business
1 answer:
prohojiy [21]3 years ago
5 0

Answer:

Company by informing employees about termination is creating constructive obligation. Company should therefore provide for restructuring costs calculated as PV of estimated termination bonus which is based on number of employees would accept the offers. The provision for expenses should be recognized on December 1 of year 1

      Journal entry to record provision for restructuring costs

Date                  General Journal                       Debit                 Credit

01/Dec/Year 1    Restructuring expenses        $1,000,000

                                Provision for termination of benefits      $1,000,000

                           (To record provision for restructuring costs)

You might be interested in
Buying a new computer for which of these reasons is most likely a sound financial decision
Anna71 [15]

Answer:

The correct answer is "You need it to do your hw".

Explanation:

A computer today is more than just a piece of entertainment. Many professionals work from home with one of these and depending on the characteristics of the job they must evaluate which computer to buy. Thus, buying a new computer involves taking into account several factors that influence the decision financially.

Have a nice day!

3 0
3 years ago
Read 2 more answers
How do the subheadings under "after high school" contribute to the organization of "career planning for high schoolers."? by inf
Delicious77 [7]

I believe the answer is: by informing readers of the education options being described

By putting the phrase  "After high schools" ,  readers would know that the information that being put below the phrase would include the set of options/paths that can be done after graduation. In most career planning forms, it would contain information regarding college, scholarships, and the type of careers that can be taken with current high school diploma.

3 0
3 years ago
Read 2 more answers
Lahdekorpi OY, a Finnish corporation, owns 100 percent of Three- O Company, a subsidiary incorporated in the United States. Requ
RUDIKE [14]

Answer:

Lahdekorpi OY, a Finnish corporation and Three-O Company, a subsidiary incorporated in the United States

Transfer Pricing:

a) The best transfer pricing method in this case is the cost plus method.  This gives the transfer price as Cost + 50%.

b) The appropriate transfer price should be $3 ($2 x 1.5).

Explanation:

Transfer pricing arises when controlled entities set prices for exchange of goods and services.  When Lahdekorpi OY, a Finnish corporation, sells wooden puzzles to Three-O Company, given their relationship, transfer pricing has arisen.  It is the assignment of cost for goods and services exchanged between related parties, like a parent and a subsidiary.

There are many Transfer Pricing methods which entities and the taxing authorities can use to determine the best transfer price.  According to the Organisation for Economic Co-operation and Development (OECD) Multinational Entities and tax authorities can use any of these five main transfer pricing methods:

a) Comparable uncontrolled price (CUP) method. The CUP method is grouped by the OECD as a traditional transaction method (as opposed to a transactional profit method)

b) Resale price method

c) Cost plus method

d) Transactional net margin method (TNMM)

e) Transactional profit split method.

7 0
3 years ago
A $298 petty cash fund has cash of $32 and receipts of $247. The journal entry to replenish the account would include credit to
Nikolay [14]

The journal entry to replenish the petty cash account is credit to Cash for $266.

<h3>How would petty cash be replenished?</h3>

The amount that needs to be replenished is:

= Petty cash fund - cash

= 298 - 32

= $266

This amount needs to be taken from the cash account which is why the cash account will be credited with $266.

Find out more on the petty cash fund at brainly.com/question/27585546

#SPJ1

7 0
2 years ago
Which of the following expresses the value of a levered firm (VL) in the Static Tradeoff model of optimal capital structure [Not
Brut [27]

Answer:

C. VL = VU + PV(Tax Shield) - PV(CFD)

Explanation:

The static trade off theory is a theory of capital structure in corporate finance, first proposed by Alan Kraus and Robert H. Litzenberger. The theory emphasizes the trade-offs between the tax benefits of increasing leverage and the cost of bankruptcy associated with higher leverage. The <u>answer is C</u> as we know relative to the unleveraged firm, leverage provides both costs and benefits. The benefits are the tax shields provided by debt.

7 0
3 years ago
Other questions:
  • Sal and Jen went to the store together, and each bought the same car stereo. Sal used a card to make the purchase, and the full
    9·1 answer
  • What would it signify if the population of a country remained the same while the real GDP increased? A) the economy is in declin
    5·2 answers
  • Cady files an employment discrimination suit against Durable Goods Corporation under the Civil Rights Act. If Cady shows that Du
    13·1 answer
  • A project costing $218,000 has equal annual cash inflows over its 7-year life. If the discounted payback period is seven years a
    12·1 answer
  • Taxes are a part of a civil society, but they have a significant effect on supply and demand for goods. A tax is an extra cost a
    8·1 answer
  • ohnstone Company is facing several decisions regarding investing and financing activities. Address each decision independently.
    8·1 answer
  • Smarty Pants Company sells two products, green camouflage pants and orange camouflage pants. Smarty Pants predicts that it will
    11·1 answer
  • Today is date 0. In 10 years, you plan to retire and buy a house in Norman, OK. In terms of a time line, you will retire at the
    8·1 answer
  • Describe how consumers have influence the success of products in recent years
    11·1 answer
  • Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: April May June Manu
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!