The 100 employees of NAM JEWELS LIMITED are each entitled to 5 working days af paid sick leave for each year. Unused sick leave may be carried forward for one calendar year Sick loave is taken first out of the current year's entitlement and then out of any balance brought forward from the previous year (a LIFO basis) At 31 December 2019 the average unused entitlement is 2 days per employee. The entity expects on the basis of experience that is expected to continue, that 92 emplayees will take no more than five days of paid sick leave in 2020 and that the remaining & will take an average an also and a half days each In December 2020 to restructure its workforce which was immediately communicated in such a way that all employees of the age of 55, but below the age of 60 at the reporting date, could retire immediately should they choose to do so. Employees of 60 years and alder, up to 65 years at the statement of financial position date will be forced to retire mmediately, but will receive the post-employment benefits they would have been entitled to had they retred at the age of 66. A directive on the matter was obtained from NAMRA beforehand, and amounts will therefore be allowed for tax purposes. Tax rate is 32% payment of any benefits associated with early or voluntary retirement will take place one week after statement of financial position date land of reporting period The information below is applicable: Employees between 55 years and 59 years and 364 days: Total number of employees in age bracket 40 Average payment per employee to encourage retirement N$20 000 Percentage of employees expected to take advantage of the aller 60% Employees with ages between 60 and 64 years and 364 days: Total number of employees 20 Additional contribution to defined contribution fund made on 7 January 2021 To ensure promised post-employment benefits as at 65 years of age N$600 000 Transaction 2 Westlife Lid mainly operates in Windhoek. As part of its expansion strategy both locally and internationally, the following investments have been made: Page 17 of 27 FACULTY OF COMMERCE, MANAGEMENT AND LAW Investment in Waverly Ltd (Waverly The management of Westlife has approached Jamie Ld (Jamie) to form a partnership to manufacture sporting goods from 1 January 2021. A separate entity Waverly, has been formed. Each entity will have a 50% shareholding in Waverty and Waverly is a separate legal entity The companies have signed an agreement that outlines the activities of the arrangement and establishes a joint operating committee. A representative from each company sits on the joint operating committee and decisions require unanimous consent. Westlife and Jamie will each be responsible for their own area of expertise. The companies carry out different parts of the manufacturing process, each using its own resources and expertise in order to manufacture and distribute the goods jointly. The two companies share the revenues from sales and jointly incur expenses. The revenues and common costs are shared as contractually agreed in the agreement A separate bank account is established through which revenue will be received and shared costs will be paid. The bank account is in the name of both companies. Each company incurs their own separate costs such as labor costs, manufacturing costs, supplies, inventory of unused parts and work in progress and recognizes their separately incurred costs fully Westlife and Jamie have committed to purchase Waverly's entire product line. The products must therefore to the quality contrail of both Westlife and Jamie. Any cash shortages that the partnership may incur will be financed by both parties in accordance with their shareholding Required: In respect of transaction 1 Marks Calculate the sick leave related liability as at 31 December 2019 Prepare journal entries for the year 31 December 2020 and 7 January 2021 3 12 15 15 15 14 Al Provide a memorandum to the management of Westlife, dealing with the following questions Is the agreement with Jamie a joint arrangement? Eyes, what is the cassification thereon and if not what is it? Page 18 of 27 FACULTY OF COMMERCE, MANAGEMENT AND LAW Communication skils: logical flow conclusion and format 30