Description: In 1984, Paul Newman turned over his Rolex watch to his daughter’s college boyfriend, James Cox, all because Cox told Newman he didn’t have a watch when Newman asked him the time. The watch had been a gift from Newman’s wife, Joanne Woodward, during the filming of a 1960s race car movie. This past week, the watch sold for a record $17.8 million at auction, proceeds going to benefit the Nell Newman Foundation.
Date: October 27, 2017
1) What determines the price customers are willing to pay for a one-of-a-kind auction item such as Paul Newman’s Rolex watch?
2) Wiley’s Financial Accounting: Tools for Business Decision Making discusses various costing models for inventory in Chapter 6. If you were a dealer in luxury goods, such as Rolex watches, what costing model would you be likely to adopt?
3) Notice from the article that the proceeds from the watch benefited a charitable foundation. Which of Wiley’s accounting textbooks – featured under the banner Canadian Accounting Products accompanying this article – would provide you with guidance on the accounting considerations for not-for-profit organizations?