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  • Mango Juice Company Has Been Suffering A Downturn in Its

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    M Bilal Saleem
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    Mango Juice Company approved a restructuring plan on July 1, 2006 due to adverse publicity about caffeine in its drinks. The plan included closing a juice plant by October 15, 2006 with $500,000 in costs, eliminating 280 plant positions providing $1,344,000 in severance payable quarterly, and terminating a juice supply contract with a $120,000 penalty. The total restructuring charge was $1,964,000 which was recorded on July 1, 2006 with a liability. The first employee severance payment of $336,000 was made on October 15, 2006.

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    Mango Juice Company approved a restructuring plan on July 1, 2006 due to adverse publicity about caffeine in its drinks. The plan included closing a juice plant by October 15, 2006 with $500,000 in costs, eliminating 280 plant positions providing $1,344,000 in severance payable quarterly, and terminating a juice supply contract with a $120,000 penalty. The total restructuring charge was $1,964,000 which was recorded on July 1, 2006 with a liability. The first employee severance payment of $336,000 was made on October 15, 2006.

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    3 views1 page

    Mango Juice Company Has Been Suffering A Downturn in Its

    Uploaded by

    M Bilal Saleem
    Mango Juice Company approved a restructuring plan on July 1, 2006 due to adverse publicity about caffeine in its drinks. The plan included closing a juice plant by October 15, 2006 with $500,000 in costs, eliminating 280 plant positions providing $1,344,000 in severance payable quarterly, and terminating a juice supply contract with a $120,000 penalty. The total restructuring charge was $1,964,000 which was recorded on July 1, 2006 with a liability. The first employee severance payment of $336,000 was made on October 15, 2006.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    Mango Juice Company has been suffering a downturn in its

    Mango Juice Company has been suffering a downturn in its juice business due to adverse
    publicity regarding the caffeine content of its drink products. As a result, the company has been
    required to restructure operations. The board of directors approved and communicated a plan
    on July 1, 2006, calling for the following actions.1. Close a juice plant on October 15, 2006.
    Closing, equipment relocation, and employee relocation costs are expected to be $500,000
    during October.2. Eliminate 280 plant positions. A severance will be paid to the terminated
    employees equal to 400% of their estimated monthly earnings payable in four quarterly
    installments on October 15, 2006; January 15, 2007; April 15, 2007; and July 15, 2007.3.
    Terminate a juice supply contract, activating a $120,000 cancellation penalty, payable upon
    notice of termination. The notice will be formally delivered to the supplier on August 15,
    2006.The 280 employees earn an average of $12 per hour. The average employee works 180
    hours per month.a. Determine the total restructuring charge.b. Journalize the entry for the
    restructuring charge on July 1, 2006. (Note: Use RestructuringObligation as the liability account,
    since the charges involve more than just employee terminations.)c. Provide the journal entry for
    the October 15, 2006, employee severance payment.d. Provide the balance sheet disclosure for
    December 31, 2006.e. Provide a note disclosure for December 31, 2006.View Solution:
    Mango Juice Company has been suffering a downturn in its
    SOLUTION-- http://expertanswer.online/downloads/mango-juice-company-has-been-suffering-a-
    downturn-in-its/

    See Answer here expertanswer.online


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