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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
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 December and has identified the following issues for discussion in a meeting with the companys IFRS consultant:
a
Costs of R 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
b
Longservice leave, estimated to be R owing to employees in respect of past services.
c
Provision of R for the replacement of a machine. The replacement is required every four years and the machine was four years old as at December
d
Damages awarded against Meg and Teg Limited resulting from a court case decided on December The judge has announced that the amount of damages will be set at a future date, expected to be in March Meg and Teg Limited has received advice from its lawyers that the amount of the damages could be anything between R and R million.
e
An amount of R owing to Sugar works Limited for raw materials provided in December
Note: The companys financial statements are authorised for issue on February
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