Wiley Accounting Updates

Posted December 9th, 2019 by Brent White & filed under Canadian Economy, Student life.

Description: Oh no – food prices are heading up. A family of four is predicted to have to spend an additional $500 on their food purchases in 2020. Unpredictable weather is the culprit, creating uncertainty in food production for farmers in Canada and elsewhere.

Date: December 5, 2019

Source: cbc.ca

Link: https://www.cbc.ca/news/business/climate-change-food-price-increase-report-1.5383507

Discussion points:

1) How much do you budget for food as part of your student costs?

2) What do you think this price uncertainty will do to the Canadian economy?

3) Wiley’s Financial Accounting: Tools for Business Decision-Making, has an appendix containing a specimen set of financial statements for Sobeys Inc., a major Canadian food retailer. What lines of the financial statements are most likely to be impacted by the rising prices in 2020?

Posted December 9th, 2019 by Brent White & filed under Contemporary Business Issues.

Description: Popular Ottawa-area coffee chain Bridgehead has been purchased by Second Cup for close to $10 million. Bridgehead has a history of supporting fair trade in the coffee business. The intent is that Bridgehead will be able to keep its own identity under the new ownership, allowing the brand to expand outside of the Ottawa region.

Date: December 5, 2019

Source: cbc.ca

Link: https://www.cbc.ca/news/canada/ottawa/bridgehead-coffeehouse-chain-sold-1.5384435

Discussion points:

1) Have you ever been to Bridgehead for a coffee? What did you like about it?

2) Why do you think Second Cup acquired Bridgehead?

3) What method would Second Cup use to account for this investment? (See page 654 of Wiley’s Financial Accounting: Tools for Business Decision-Making for a hint).

Posted December 2nd, 2019 by Brent White & filed under Corporate Restructuring.

Description: Sardine giant Connors Brothers in Blacks Harbour, New Brunswick, has entered corporate restructuring under the Companies’ Creditors Arrangement Act. Production at the plant continues, good news for suppliers and the up to 800 employees. This is the last plant in North America that still processes the tiny sardines.

Date: November 29, 2019

Source: cbc.ca

Link: https://www.cbc.ca/news/canada/new-brunswick/seafood-creditor-protection-bankruptcy-blacks-harbour-1.5378295

Discussion points:

1) Why do you think the fish plant would own the municipal water supply?

2) Look online for information on Canada’s Companies’ Creditors Arrangement Act. What does a court-supervised restructuring mean?

3) On page 737 of Wiley’s Financial Accounting: Tools for Business Decision-Making, you can read about another large seafood company, Clearwater Seafoods Incorporated. This section notes that although Clearwater reported a large loss in 2015, it generated significant cash flow from operations. Can you explain how this could happen?

Posted December 2nd, 2019 by Brent White & filed under Marketing & Strategy, Sustainable Development.

Description: Imported directly from the United States: that appears to be one way to describe the increasing popularity of retail sales in Canada on the day after the American Thanksgiving. This Black Friday trend is replacing Boxing Day as the landmark retail event for Canadian consumers. Meanwhile, other citizens in a number of cities worldwide were holding protests against the consumerism they see evident in Black Friday. France is talking of banning Black Friday in order to cut back on waste. https://www.cbc.ca/radio/thecurrent/the-current-for-nov-29-2019-1.5378009/we-can-t-shop-our-way-out-of-this-why-all-those-black-friday-deals-are-costly-for-the-environment-1.5378014

Date: November 29 , 2019

Source: cbc.ca

Link:

https://www.cbc.ca/news/business/black-friday-1.5377842

Discussion points:

1) Where were you on Black Friday?

2) If you were an executive at a retailer, how would you handle the conflict between generating revenue versus sustainability in answering the Black Friday question?

3) Pages 10-11 of Wiley’s Managerial Accounting: Tools for Business Decision-Making explains the concept of Corporate Social Responsibility. How could the triple bottom line help companies address sustainability while maintaining profitability?

Posted December 2nd, 2019 by Brent White & filed under Student life.

Description: It may not be a surprise: complaints against telecom companies in Canada have hit record levels. The Commission for Complaints for Telecom-television Services (CCTS) said complaints were up 35 per cent for the year ended July 31. Bell Canada was at the top – or should that be the bottom? – with 30% of the complaints.

Date: November 28, 2019

Source: thestar.com

Link: https://www.thestar.com/business/2019/11/28/canadian-telecom-complaints-hit-record-high-with-bell-leading-the-pack.html?source=newsletter&utm_source=ts_nl&utm_medium=email&utm_email=760BE779956395955CFBBA5C497D22A3&utm_campaign=sbj_18209&utm_content=a01

Discussion points:

1) What do you think of your phone service provider? Do you have complaints?

2) What could an accountant do to attach a cost to these customer complaints?

3) On page 8 of Wiley’s Managerial Accounting: Tools for Business Decision-Making you can read how Bell Canada uses complex systems to both control and evaluate its managers. How might these customer complaints fit into the control and evaluation process?

Posted November 25th, 2019 by Brent White & filed under Accounting Careers.

Description: When Henry Ford and others brought in the eight-hour work day, it seemed like a great deal for workers. But many knowledge workers would be happy to see their day stop when eight hours had been clocked. Freelance writer Lizzie Wade offers an interesting perspective in such an environment, questioning if a knowledge worker can do it all in a five-hour day.

Date: November 21, 2019

Source: wired.com

Link: https://www.wired.com/story/eight-hour-workday-is-a-lie/?bxid=5bd6743724c17c104800c5b3&cndid=33552549&esrc=CM_CRM_2014&source=EDT_WIR_NEWSLETTER_0_DAILY_ZZ&utm_brand=wired&utm_campaign=aud-dev&utm_mailing=WIR_Daily_112119&utm_medium=email&utm_source=nl&utm_term=list1_p4

Discussion points:

1) What do you think of the author’s arguments for a five-hour work day for certain creative occupations like writing?

2) What are some of the challenges faced by people who work from a home office versus people who go to an office to work?

3) On page 16 of Wiley’s Managerial Accounting: Tools for Business Decision-Making, there is a section on the accounting profession in Canada. How do you think the profession would respond to the five-hour day?

Posted November 25th, 2019 by Brent White & filed under Accounting Careers, Marketing & Strategy.

Description: In last week’s Wiley Accounting Weekly Updates you would have seen a story on the new Apple credit card. This week it’s Google hitting the news, with its announcement that it will be moving into chequing accounts. Google is adopting a strategy of putting its banking partners up front in this venture, differentiating it from Apple with its ads that the Apple credit card was “designed by Apple, not a bank.” Apple’s approach was not well received by its banking partner Goldman Sachs.

Date: November 13, 2019

Source: thestar.com; wsj.com

Link: https://www.thestar.com/wsj/business/2019/11/13/next-in-googles-quest-for-consumer-dominancebanking.html?source=newsletter&utm_source=ts_nl&utm_medium=email&utm_email=760BE779956395955CFBBA5C497D22A3&utm_campaign=wsj_17897&utm_content=a&source=newsletter&utm_source=ts_nl&wul=tre&utm_medium=emailutm_email=760BE779956395955CFBBA5C497D22A3&utm_campaign=wsj_17897&utm_content=a07

Discussion points:

1) Why do you think the big tech companies are so interested to move into financial services?

2) If you were an accounting executive at a financial institution, what strategies might you recommend to deal with the threat posed by the tech companies entering their world?

3) P13-8B on page 755 of Wiley’s Financial Accounting: Tools for Business Decision-Making asks the question “Why do you think Microsoft has paid out dividends while Google has not”? What do you think?

Posted November 25th, 2019 by Brent White & filed under Data security, Ethics.

Description: It’s already happening. Last week, Disney launched streaming service DisneyPlus; this week user accounts and passwords started showing up on hacker websites. Now that’s what I call efficiency! Unfortunately, it’s the type of efficiency that comes by exploiting system weaknesses. Professor Paul Rohmeyer, from the Stevens Institute of Technology in New Jersey, said he was surprised that streaming services have not improved security by initiating two factor identification.

Date: November 20, 2019

Source: cbc.ca

Link: https://www.cbc.ca/news/technology/disney-plus-hacking-1.5366010

Discussion points:

1) How does two factor identification improve security?

2) Would you consider purchasing an ID and password for $3 as an alternative to signing up for a $7 a month DisneyPlus account?

3) See Figure 10-1 on page 313 of Wiley’s Core Concepts of Accounting Information Systems. Assume the role of an accountant who is advising Disney on developing security policies. Which points in Figure 10-1 do you believe would be most important to stress to management?

Posted November 18th, 2019 by Brent White & filed under Marketing & Strategy.

Description: In terms of a library of content, it probably makes great sense for Disney to have opened its own streaming service this week. It has already been a big hit, with millions of subscribers already signing on for the fee of $7 per month. Disney has already hit 10 million subscribers, a target some analysts thought it would take a year to reach. That’s pretty impressive in just a few days.

Date: November 13, 2019

Source: cbc.ca

Link: https://www.cbc.ca/news/business/disney-plus-subscribers-1.5358047

Discussion points:

1) Have you subscribed to the Disney streaming service? If so, what attracted you to it?

2) Streaming services are becoming concerned about multiple users on the the same streaming account via password sharing. If you were responsible for getting control over the problem at one of the streaming companies, what would you recommend?

3) On page 372, Illustration 9.1, of Wiley’s Managerial Accounting: Tools for Business Decision-Making, we see four key pricing factors that influence pricing decisions. Which of these four factors would have been most influential when Disney made the strategic decision to charge a $7 fee?

Posted November 18th, 2019 by Brent White & filed under Accounting Principles.

Description: If you slip up, you could become a victim of zombie debt. What? Some debt is subject to a statute of limitations, meaning you can’t be taken to court to force payment after a certain period of time has passed. But if you acknowledge this debt after this period has passed, perhaps by responding to an inquiry by a collection agency, then the clock starts all over again. With Canadians carrying considerable levels of credit card and other consumer debt, this can be a significant issue for citizens who thought they may have escaped a past claim.

Date: November 11, 2019

Source: cbc.ca

Link: https://www.cbc.ca/news/canada/edmonton/zombie-debt-canadians-1.5355333

Discussion points:

1) Have you ever heard of this statute of limitations on debt?

2) Do you know anyone who has avoided payment by taking advantage of the statute of limitations? What is your opinion of this as a strategy/

3) On page 423 of Wiley’s Financial Accounting: Tools for Business Decision-Making, is a section on collecting uncollectible accounts. What journal entries does a company make to record collection on an account previously written off?