Explain how the benefits from the plan of termination would be accounted for by Meadow Ltd in accordance with the requirements of AASB 119.

(Based on Illustrative example, AASB 119, paras 159–170.) Meadow Ltd plans to close

 

a factory in 10 months’ time, when it will terminate the employment of all employees

who remain at the factory. Meadow Ltd requires the services of the employees at the

factory to fulfil its contractual obligations and so the terms of the plan of termination

are as follows:  Each employee who continues to provide services until the factory closure will receive a cash payment of $40 000 on the termination date.

• Each employee who leaves before the closure of the factory will receive a cash

payment of $15 000.

At the date the termination plan is announced, there are 120 employees at the factory

and only 20 employees are expected to leave before the factory’s closure.

Required

Explain how the benefits from the plan of termination would be accounted for by Meadow

Ltd in accordance with the requirements of AASB 119. (LO2, LO8)

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Determine the trust’s Net Income For Tax Purposes and Taxable Income for the current year.

During the current year, the Jordan family trust, an inter vivos trust, has business income of $220,000. Of this amount, $50,000 is retained in the trust with a joint election….

Indicate the tax effects of these transactions on the Net Income For Tax Purposes for both the trust and for Bryan.

During 2020, the Ho family trust received eligible dividends from publicly traded Canadian corporations in the amount of $100,000. In addition, it received non-eligible dividends from the family owned Canadian….

compare the tax consequences for both Martin and the trust if the sale takes place in December 2020

The Husak family trust has only one beneficiary, Martin Husak, the 32 year old son of the settlor, Dimitri Husak. It is an inter vivos trust and its only asset….