http://www.cbc.ca/money/story/2009/01/23/f-money-minimum-wage.html
Summary
The purpose of minimum wage is to provide work for those who are unskilled or non-unionized and also to prevent undercutting. In the 19th century, there was no minimum wage throughout the country. However, by 1912, over 100,000 workers belonged in a union which helped the workers lead to the creation of minimum wage in 1918. By 1960, all of Canada had minimum wage. Today, the minimum wage rate varies partially by inflation and by an ad-hoc basis. Exception to minimum wage in Canada varies, including the self-employed, students in training programs, and more. There is a large amount of people who depend on minimum wage, and they are barely getting by. According to Campaign 2000, 45% of low income children live in a family where at least one parent worked full-time. Some say the solution can be to increase the minimum wage. However, it can lead to job cuts. Others say that it is not a matter of increasing the wage, but rather to provide wage supplements.
Connection
Chapter 16 discusses about payroll and the procedures of how to record it into journal entries. In the article, wages are discussed in more detail. The article talks about minimum wage, something that is not discussed in the text book. Wages are for people with "blue-collar" jobs, meaning people who perform manual labour, such as construction workers and farmers. Minimum wage is the same thing, but the pay is the lowest amount paid by the employer to make sure the person can have a decent living. However, people who make a living with minimum wage can barely make a living, let alone a decent one.
Reflection
For people who are barely getting by on minimum wage, I think raising the wage is not a healthy solution. If the minimum wage increases, small businesses would want to hire less employees and have the employers work more than they should to compensate the amount of work that would be needed from the person who could have gotten a position if the minimum wage did not increase. Because this possible solution can produce these consequences, it can worsen the economy. As a solution, I think the people who are unable to make a decent living with minimum wage should look for social welfare. Furthermore, they should be educated in learning how to invest and save to be able to earn a decent living.
Tuesday, April 27, 2010
Saturday, April 10, 2010
Ch 15: Christmas in April as profits rebound
http://www.financialpost.com/story.html?id=2785590
Summary
Next week is the first quarter for earning reports. The markets for North America should be optimistic this year for a few reasons. Goods and services are increasing, the demand for products are rising, and inventory is pretty low. For the United States, the mean average gain of the S&P 500 for the first quarter earnings is expected to be 36%. It sounds good, but the reason why the index predicts that it will be doing well is because it was doing poorly for the previous year. Furthermore, it is not the mean average gain that should be looked at, but rather the median average gain. The median average gain for the 30 Dow Jones Industrial Companies is 10.2% and it is because of "materials, energy, technology, and industrial sectors as well as financial services." For Canada, we are doing much better. Our top 60 companies (includes the "gold, base metal, and energy companies") has a median average gain of around 18.2%. Since the first quarter annual reports will likely be good results, it will lead to other good news, such as dividend increases.
Connection
This article is related to Chapter 15 because it talks of how well the market is performing. When a market performs well, many will want to invest in certain companies. S&P 500 and 30 Dow Jones are reputable companies that investors take into account when deciding what companies to invest in because they are outsiders who analyze and study financial strengths of companies. When they talk of mean average gains and median average gains which are going up, people see a bright future and will want to invest in these companies' analyses that have good results.
Reflection
The future seems bright, but if I wanted to invest in a business or company, I would not depend or confide completely on the indexes like S&P 500 and 30 Dow Jones, despite their reputation. In 2002, Enron was part of the S&P 500, and it led to over $1.3 billion dollars lost for those who invested in the company because they made a sudden file for bankruptcy. However, I would want to invest in a few companies under the S&P or Dow Jones because the overall performance of the market is doing well.
Summary
Next week is the first quarter for earning reports. The markets for North America should be optimistic this year for a few reasons. Goods and services are increasing, the demand for products are rising, and inventory is pretty low. For the United States, the mean average gain of the S&P 500 for the first quarter earnings is expected to be 36%. It sounds good, but the reason why the index predicts that it will be doing well is because it was doing poorly for the previous year. Furthermore, it is not the mean average gain that should be looked at, but rather the median average gain. The median average gain for the 30 Dow Jones Industrial Companies is 10.2% and it is because of "materials, energy, technology, and industrial sectors as well as financial services." For Canada, we are doing much better. Our top 60 companies (includes the "gold, base metal, and energy companies") has a median average gain of around 18.2%. Since the first quarter annual reports will likely be good results, it will lead to other good news, such as dividend increases.
Connection
This article is related to Chapter 15 because it talks of how well the market is performing. When a market performs well, many will want to invest in certain companies. S&P 500 and 30 Dow Jones are reputable companies that investors take into account when deciding what companies to invest in because they are outsiders who analyze and study financial strengths of companies. When they talk of mean average gains and median average gains which are going up, people see a bright future and will want to invest in these companies' analyses that have good results.
Reflection
The future seems bright, but if I wanted to invest in a business or company, I would not depend or confide completely on the indexes like S&P 500 and 30 Dow Jones, despite their reputation. In 2002, Enron was part of the S&P 500, and it led to over $1.3 billion dollars lost for those who invested in the company because they made a sudden file for bankruptcy. However, I would want to invest in a few companies under the S&P or Dow Jones because the overall performance of the market is doing well.
Thursday, March 25, 2010
Chapter 14 Cash Control and Banking; Cashier Embezzled over $600k in Public Funds
http://www.komonews.com/news/local/85298802.html
Summary:
In Port Angeles, Washington, Catherine Betts was arrested after being charged for an embezzlement of "more than $600,000 in public funds, according to a report by the state Auditor's Office." Catherine Betts was the former cashier of the Clallam County Treasurer's Office and may be charged for first-degree theft, which includes a $20,000 fine and ten years in jail for "manipulating transactions." It is asid that the actual embezzlement amount could possibly be more by over one hundred thousand dollars, but much of the source documents and records such as daily reconciliations could not be found. Furthermore, it has been claimed by a report of the state Auditor's Office that the theft began from February 2004 to May 2009. When the investigation began in May 2009, she was put on administrative leave and eventually terminated. It was only until the allegation begam that lwas were reinforced into the system of the Treasury Office to prevent any other theft.
Connection:
The article relates to Chapter 14 in the text book because it is about internal control. In this case, the internal control is poorly constructed. When involving the financial affairs of a state county, internal countrol is necessary. Catherine Betts was a trustee and account holder who was given fiduciary responsibility to "process real estate taxes, deposits and tax affidavits," and moer. A rule that determines good internal control includes having two people processing and preparing documents that are independent of each other and should agree. Another rule of internal control is that one person should not handle physical assets of accounting records (in this case, public funds). However, the Treasurer's Office has one person controlling the documents and handling both public funds and records. The county's Treasurer Office lacks good internal control.
Reflection:
I am surprised to see that the county's Treasury Office lacks good control, and that the treasurer was able to let this happen. The treasurer should have either had a close watch on the cashier (who is given responsibility to be in charge of private documents and assets of the county) or made more laws regarding who controls the documents and assets of the Office. Instead, the actions of providing good internal control occur after the problem has occurred. The Treasurer should have made more procedures regarding the security of the funds and have the cashier monitored on occasion.
Summary:
In Port Angeles, Washington, Catherine Betts was arrested after being charged for an embezzlement of "more than $600,000 in public funds, according to a report by the state Auditor's Office." Catherine Betts was the former cashier of the Clallam County Treasurer's Office and may be charged for first-degree theft, which includes a $20,000 fine and ten years in jail for "manipulating transactions." It is asid that the actual embezzlement amount could possibly be more by over one hundred thousand dollars, but much of the source documents and records such as daily reconciliations could not be found. Furthermore, it has been claimed by a report of the state Auditor's Office that the theft began from February 2004 to May 2009. When the investigation began in May 2009, she was put on administrative leave and eventually terminated. It was only until the allegation begam that lwas were reinforced into the system of the Treasury Office to prevent any other theft.
Connection:
The article relates to Chapter 14 in the text book because it is about internal control. In this case, the internal control is poorly constructed. When involving the financial affairs of a state county, internal countrol is necessary. Catherine Betts was a trustee and account holder who was given fiduciary responsibility to "process real estate taxes, deposits and tax affidavits," and moer. A rule that determines good internal control includes having two people processing and preparing documents that are independent of each other and should agree. Another rule of internal control is that one person should not handle physical assets of accounting records (in this case, public funds). However, the Treasurer's Office has one person controlling the documents and handling both public funds and records. The county's Treasurer Office lacks good internal control.
Reflection:
I am surprised to see that the county's Treasury Office lacks good control, and that the treasurer was able to let this happen. The treasurer should have either had a close watch on the cashier (who is given responsibility to be in charge of private documents and assets of the county) or made more laws regarding who controls the documents and assets of the Office. Instead, the actions of providing good internal control occur after the problem has occurred. The Treasurer should have made more procedures regarding the security of the funds and have the cashier monitored on occasion.
Thursday, January 14, 2010
Degree Discount for up-front cash
http://news.bbc.co.uk/2/hi/uk_news/education/5327092.stm
Summary
In the United Kingdom, Gloucestershire University allows a 20% discount for tuition fees for undergraduates who can afford to "pay their three-years' tuition" prior to taking the course. This does not include payments that come from loans and those are unable to pay the one-off fee. This would make "the situation... grossly unfair" and "rewarding richer students for being rich," according to the National Union of Students. The National Union of Students also beleive that the degree discount scheme is not fair because it excludes those who really need the extra funding who can either pay part of the fee or ask for loans.
Connection
Connecting with this article with what we have learned in Accounting 12 helped me find it as a good example of the definition of a cash discount. The undergraduate students, who are potential customers of Gloucestershire University, are able to get a discount if they can pay 2-3 year tuition free in full. The students who ask for loans have not paid the tuition fee with their own money, therefore resulting in paying for the full price gradually. Accountants would see this degree discount as a benefit for the university because the school would be able to use the cash for purposes that can improve the well-being out of school and the students of the University for there is an look in their Bank Account.
Reflection
After reading the article, I think the scheme is a good idea. Everyone should have the advantage of earning discounts when continuing their education. Students who choose to go to university ay have tried to save for their tuition fee but could not save enough to pay for it and get the discount on their own. They would need the help of their parents who use their hard-earned money to be able to obtain the discount. Everyone should get a fair share of earning bursaries to continue their education by looking for ways to do so.
Summary
In the United Kingdom, Gloucestershire University allows a 20% discount for tuition fees for undergraduates who can afford to "pay their three-years' tuition" prior to taking the course. This does not include payments that come from loans and those are unable to pay the one-off fee. This would make "the situation... grossly unfair" and "rewarding richer students for being rich," according to the National Union of Students. The National Union of Students also beleive that the degree discount scheme is not fair because it excludes those who really need the extra funding who can either pay part of the fee or ask for loans.
Connection
Connecting with this article with what we have learned in Accounting 12 helped me find it as a good example of the definition of a cash discount. The undergraduate students, who are potential customers of Gloucestershire University, are able to get a discount if they can pay 2-3 year tuition free in full. The students who ask for loans have not paid the tuition fee with their own money, therefore resulting in paying for the full price gradually. Accountants would see this degree discount as a benefit for the university because the school would be able to use the cash for purposes that can improve the well-being out of school and the students of the University for there is an look in their Bank Account.
Reflection
After reading the article, I think the scheme is a good idea. Everyone should have the advantage of earning discounts when continuing their education. Students who choose to go to university ay have tried to save for their tuition fee but could not save enough to pay for it and get the discount on their own. They would need the help of their parents who use their hard-earned money to be able to obtain the discount. Everyone should get a fair share of earning bursaries to continue their education by looking for ways to do so.
Wednesday, October 14, 2009
Merchandising - Vital signs: slower inventory cuts can help boost growth
http://www.businessweek.com/investor/content/oct2009/pi2009108_704845.htm
Summary:
After analyzing data on "labour market, factory orders, and the Institute for Supply Management's manufacturing survey", economists' forecasts on economic growth for the third-quarter are at a low percentage (under 3%). Companies' inventory reports from August are heavliy relied on to predict the third-quarter GDP where these companies should have had their liquidation reduced by a large amount (in the second-quarter their stockpiles reduced to $160 billion), because "Every reduction of $30 billion in the rate of liquidation adds about one percentage point to GDP growth." Although more records from August are needed for more precision on the forecast, economists "expect the lower rate of inventory cutting to boost GDP by about 2 percentage points." In other words, when inventory is reduced, the GDP is increased, thus improving the economy. For the consumers, they are a main componene for the quarter's growth. In August, sales on cash-for-clunkers (used cars) increased by 2.7%; but the economy in September on consumer spending will go down, slowing down the merchandising business. However, when it comes to consumer price inflation, the Federal Reserve (or Feds) and economists do not share the same point of view. The Feds do not want an unwanted "pickup in inflation" while economists do not want deflation.
Connection:
In Chapter 11, it describes in detail about the merchandising business and how certain variables affect the profitability of a business. In this case, the article relates to this chapter, the inventory in particular. When the inventory is high, the assets are high because this is something that a company owns. However, according to the inventory calculation, when there is less inventory in the ending quarter, profit is increased. Therefore, having more inventory would have a negative impact on the company's profit because less products were sold than produced. Lowering the liquidation rate would give a positive impact to the GDP rate.
Reflection:
In my opinion, the article narrows to two specific examples of how the GDP rate can increase. It is too narrow because the Gross Domestic Product is measured by how the total number of producers and consumers interact with one another and whether the outcome of it will have a high or low or even negative change. The examples of production pertains only to the amount of inventory and cash-for-clunkers, and not the whole market of producers and consumers, which is probably why the GDP increase of the two examples in the article is a small increment.
Summary:
After analyzing data on "labour market, factory orders, and the Institute for Supply Management's manufacturing survey", economists' forecasts on economic growth for the third-quarter are at a low percentage (under 3%). Companies' inventory reports from August are heavliy relied on to predict the third-quarter GDP where these companies should have had their liquidation reduced by a large amount (in the second-quarter their stockpiles reduced to $160 billion), because "Every reduction of $30 billion in the rate of liquidation adds about one percentage point to GDP growth." Although more records from August are needed for more precision on the forecast, economists "expect the lower rate of inventory cutting to boost GDP by about 2 percentage points." In other words, when inventory is reduced, the GDP is increased, thus improving the economy. For the consumers, they are a main componene for the quarter's growth. In August, sales on cash-for-clunkers (used cars) increased by 2.7%; but the economy in September on consumer spending will go down, slowing down the merchandising business. However, when it comes to consumer price inflation, the Federal Reserve (or Feds) and economists do not share the same point of view. The Feds do not want an unwanted "pickup in inflation" while economists do not want deflation.
Connection:
In Chapter 11, it describes in detail about the merchandising business and how certain variables affect the profitability of a business. In this case, the article relates to this chapter, the inventory in particular. When the inventory is high, the assets are high because this is something that a company owns. However, according to the inventory calculation, when there is less inventory in the ending quarter, profit is increased. Therefore, having more inventory would have a negative impact on the company's profit because less products were sold than produced. Lowering the liquidation rate would give a positive impact to the GDP rate.
Reflection:
In my opinion, the article narrows to two specific examples of how the GDP rate can increase. It is too narrow because the Gross Domestic Product is measured by how the total number of producers and consumers interact with one another and whether the outcome of it will have a high or low or even negative change. The examples of production pertains only to the amount of inventory and cash-for-clunkers, and not the whole market of producers and consumers, which is probably why the GDP increase of the two examples in the article is a small increment.
Monday, September 21, 2009
Madoff Sentenced to 150 Years for Ponzi Scheme
Link:
http://www.bbc.co.uk/worldservice/business/2009/06/090630_madoff_sentence.shtml
Resources:
http://www.cbsnews.com/stories/2008/12/15/cbsnews_investigates/main4670631.shtml
http://www.economist.com/businessfinance/displaystory.cfm?story_id=14214978
http://s.wsj.net/public/resources/documents/st_madoff_victims_20081215.html
Summary:
On June 30, 2009, Bernard Madoff (former Chairman of Bernard L. Madoff Investment Securities LLC) was arrested for one of the largest frauds in American history. His investment firm with exclusive clientele led his customers to believe they would gain between 10-15% interest in the fund-management investments (bonds, treasuries, etc.), but he would pocket the majority of their money and return only part of it.
Connections:
A few of the many connections to Madoff's ponzi scheme include the Generally Accepted Accounting Principles. He faked transactions, violating the Objectivity Principle because there is no reasonable evidence supporting the transaction. Sending fake statements to clients would mean disrupting the Revenue Recognition Convention because the money put into the investments have not made any interest/profit. Not only did he violate the accounting principles, he also made a negative impact on the global economy with his scam of over $67 billion in losses that include world wide companies and people. Madoff's whole ponzi scheme caused many companies' shares in stock to drop and caused many wealthy investors to put a large amount of money into his fabricated funds, worsening the economy.
Reflections:
Because Madoff's scam added up to over $67 billion, it resulted in his sentence of 150 years in prison. 150 years seems a long time, espectially since he is at a retiring age, but I think he deserves his sentence becaue it makes businesses become more aware of the consequences if one were to try and cheat off one's clientele. Furthermore, such a scam would directly and indirectly worsen the global economy. It is the last thing everyone would want, especially with the ongoing progress of the economy. Another point to add on Madoff and his scam is he not only violated the accounting principles and made a negative impact on the economy but also did something immoral. Many charital works including Steven Spielberg's were under the hands of Madoff. Throughout this article, it makes me want to think twice before investing in any type of fund, for one does not know how their money is handled under the hands of a stranger.
http://www.bbc.co.uk/worldservice/business/2009/06/090630_madoff_sentence.shtml
Resources:
http://www.cbsnews.com/stories/2008/12/15/cbsnews_investigates/main4670631.shtml
http://www.economist.com/businessfinance/displaystory.cfm?story_id=14214978
http://s.wsj.net/public/resources/documents/st_madoff_victims_20081215.html
Summary:
On June 30, 2009, Bernard Madoff (former Chairman of Bernard L. Madoff Investment Securities LLC) was arrested for one of the largest frauds in American history. His investment firm with exclusive clientele led his customers to believe they would gain between 10-15% interest in the fund-management investments (bonds, treasuries, etc.), but he would pocket the majority of their money and return only part of it.
Connections:
A few of the many connections to Madoff's ponzi scheme include the Generally Accepted Accounting Principles. He faked transactions, violating the Objectivity Principle because there is no reasonable evidence supporting the transaction. Sending fake statements to clients would mean disrupting the Revenue Recognition Convention because the money put into the investments have not made any interest/profit. Not only did he violate the accounting principles, he also made a negative impact on the global economy with his scam of over $67 billion in losses that include world wide companies and people. Madoff's whole ponzi scheme caused many companies' shares in stock to drop and caused many wealthy investors to put a large amount of money into his fabricated funds, worsening the economy.
Reflections:
Because Madoff's scam added up to over $67 billion, it resulted in his sentence of 150 years in prison. 150 years seems a long time, espectially since he is at a retiring age, but I think he deserves his sentence becaue it makes businesses become more aware of the consequences if one were to try and cheat off one's clientele. Furthermore, such a scam would directly and indirectly worsen the global economy. It is the last thing everyone would want, especially with the ongoing progress of the economy. Another point to add on Madoff and his scam is he not only violated the accounting principles and made a negative impact on the economy but also did something immoral. Many charital works including Steven Spielberg's were under the hands of Madoff. Throughout this article, it makes me want to think twice before investing in any type of fund, for one does not know how their money is handled under the hands of a stranger.
Subscribe to:
Posts (Atom)