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Meg and Teg Limited consists of a chain of muffin outlets that makes and sells muffins to the public. The financial director is finalising the

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Meg and Teg Limited consists of a chain of muffin outlets that makes and sells muffins to the public. The financial director is finalising the preparation of the financial statements for the year ended 31 December 2023 and has identified the following issues for discussion in a meeting with the companys IFRS consultant:
a)
Costs of R100000 estimated to be incurred for relocating a staff member, B. Perle, from the companys head office in Durban to Cape Town to set up shop and manage a new store. The staff member will physically relocate during July 2024.(3)
b)
Long-service leave, estimated to be R300000, owing to employees in respect of past services. (7)
c)
Provision of R150000 for the replacement of a machine. The replacement is required every four years and the machine was four years old as at 31 December 2023.(3)
d)
Damages awarded against Meg and Teg Limited resulting from a court case decided on 22 December 2023. The judge has announced that the amount of damages will be set at a future date, expected to be in March 2024. Meg and Teg Limited has received advice from its lawyers that the amount of the damages could be anything between R100000 and R30 million.
(7)
1
e)
An amount of R550000 owing to Sugar works Limited for raw materials provided in December 2023.(5)
Note: The companys financial statements are authorised for issue on 24 February 2024
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