Question

Journalize these business events: On March 1, Jones Corporation consolidates operations by closing a factory. The plant and equipment is impaired by $750,000.

b. 200 employees will be terminated because of the plant closing. The will be a termination benefit of $5000 per employee. Employees can work up to 60 days beyond March 1, but can leave earlier.

c.Twenty five employees find employment elsewhere and leave the company on March 25. Payment is made to these employees on that date.

Answer 1

Date	Account Name			Debit	Credit
1-Mar	Impairment Loss			750000
		Plant and Machinery			750000
	(Impairment on asset recognised and
	booked as expense)
1-Mar	Termination Benefit			1000000
		Employees			1000000
	(Termination benefit to be paid to
	employees recognised-5000*200)
25-Mar	Employees			125000
		Bank			125000
	(25 employees left their
	termination benefit paid
	to them)
25-Mar	Salary			Amount not given
	Bank			in question
	(Salary paid through
	Bank for 25 days of work
	to 25 employees)

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