Wiley Accounting Updates

Posted February 26th, 2018 by Brent White & filed under Corporate Strategy, Student life.

Description: A recent survey indicates that 28 % of Canadians spend two hours or more on their smartphones each day. The rate jumps to approximately 50% for users between 18 and 34. Investors and others are urging phone makers – like giants Apple and Samsung – to do more to address the subject of smartphone addiction.

Date: February 23, 2018

Source: financialpost.com

Link: http://business.financialpost.com/news/half-of-young-canadian-adults-spend-two-or-more-hours-per-day-on-their-cellphones?

1) How much do you use your smartphone each day? Have you ever tried to reduce the time you spend on it?

2) Apple and Samsung, as well as other tech giants, seem to be in a strange situation. They obviously want to encourage users to spend time on their products. But at the same time they are drawing negative attention regarding this so-called smartphone addiction. What might be some strategic responses to these two conflicting pressures?

3) In chapter 14 of Wiley’s Financial Accounting: Tools for Business Decision Making, you can read about Apple’s gross profit margin and its connection to share price (see page 786). Check out more recent statistics on gross profit margin and share price to see if the relationship continues.

Posted February 19th, 2018 by Brent White & filed under Corporate Strategy.

Description: Westjet Airlines, known for innovation in the industry, is entering the ultra low cost carrier (ULCC) by introducing its subsidiary Swoop. Come June 2018, you will be able to fly this new airline with the hot-pink Swoop logo for only $69 between Hamilton and Winnipeg. Don’t expect any frills though. You will pay for snacks and drinks. And you’ll feel an even tighter squeeze on your legroom as Swoop reduces that space to cram more seats into the aircraft.

Date: February 13, 2018

Source: calgaryherald.com

Link: http://calgaryherald.com/business/local-business/varcoe-get-ready-for-the-arrival-of-ultra-low-cost-air-travel-in-canada

1) As a student, does the arrival of ULCCs make you rethink your travel plans?

2) What would be some of the key strategic issues an airline would face in starting up a ULCC?

3) In chapter 9 of Wiley’s Financial Accounting: Tools for Business Decision Making, you can read about Westjet’s strategy for acquiring aircraft. According to that chapter opening vignette, Westjet leases about 30% of its aircraft fleet. Why would the airline choose to lease some aircraft and purchase the rest outright? Do you think Swoop will lease its planes or buy them?

Posted February 19th, 2018 by Brent White & filed under Canadian governments.

Description: The competition was tight with a number of dubious entries. But the new $8.2 million skating rink on Parliament Hill took the top spot in the Canadian Taxpayers Federation’s annual awards for federal government waste. This outdoor rink – a mere stone’s throw from the world’s longest skating rink, the Rideau Canal – works out to about $53 per skater. Ouch! In the provincial government contest, Ontario’s choice to borrow money to keep power rates artificially low “won” over New Brunswick’s $63.4 million failed bailout of Atcon construction.

Source: globalnews.ca

Date: February 14, 2018

Link: https://globalnews.ca/news/4025153/parliament-hill-rink-teddy-waste-award-2018/

1) Have you ever experienced an incident of government waste? What did you see?

2) Do you think that an award for some of these big scandals helps to prevent further government waste?

3) What account would something like the Parliament Hill rink show up in? Could you find it easily in the financial statements or would it take some special digging?

Posted February 19th, 2018 by Brent White & filed under Marketing & Strategy, Student life.

Description: After rising to a total of approximately 20% of book sales three years ago, digital book sales are dropping. Despite the stories of the disappearance of print media, digital sales are now down to about 15% of total book sales. Print seems to be hanging on just fine in the face of the digital onslaught. Maybe it’s the texture and the feel. Perhaps people like seeing them on a bookshelf. Maybe it’s the ability to highlight your textbook with your favourite colour of ink. For whatever reason, books are not dead.

Date: February 16, 2018

Source: thewashingtompost.com

Link: https://www.washingtonpost.com/business/economy/the-latest-mystery-in-publishing-that-pulp-is-far-from-dead/2018/02/15/818179f4-11bb-11e8-8ea1-c1d91fcec3fe_story.html?utm_term=.9d142b90c87e

1) Were you surprised to see that digital book sales are dropping?

2) As a student, are you using both digital and print versions of textbooks? Which do you prefer? Why?

3) In Wiley’s Financial Accounting: Tools for Business Decision Making, page 86, BE 2-5, you can read about the current ratio of Indigo Books and Music. If you assume Indigo has experienced a similar decline in sales of e-books, and it has replaced that loss with sales of physical books, what impact might this have on Indigo’s current ratio?

Posted February 12th, 2018 by Brent White & filed under e-Commerce, Ethics.

Description: After years of losses, Twitter has finally posted a quarterly profit. New tools that have helped to keep users online longer could be behind the recent success. This is definitely better news for Twitter than all the 2017 talk of how Russian bots may have infiltrated the social media platform and influenced the 2016 US election.

Date: February 08, 2018

Source: bloomberg.com

Link: https://www.bloomberg.com/news/articles/2018-02-08/twitter-posts-surprise-sales-gain-monthly-user-growth-stagnates

1) Were you surprised to see that this was the first time Twitter has recorded a profit?

2) Why do you think that some of the big social media players like Twitter and Snapchat have such a difficult time turning a profit?

3) In Wiley’s Financial Accounting: Tools for Business Decision Making, page 422, you can read of how debt collectors sometimes set up fake profiles on social media like Twitter to link with debtors . Do you think debt collectors should be allowed to employ this strategy in trying to collect accounts receivable?

Posted February 12th, 2018 by Brent White & filed under Financial Accounting, Student life.

Description: The sales are up but the stock price is down. High-end winter coat supplier Canada Goose is continuing its sales success with some sizes and styles selling out, despite sticker prices upwards of $1,500. This success is driving sales and profits upwards. But this past Thursday the Canada goose stock dropped 15%. Perhaps even high earnings is not enough to help keep the price up when the market as a whole is heading south.

Date: February 08, 2018

Source: financialpost.com

Link: http://business.financialpost.com/news/retail-marketing/why-canada-goose-is-taking-a-market-beating-despite-record-earnings

1) Do you see many Canada Goose parkas around your university campus?

2) What do you think caused the Canada Goose shares to drop despite the good news about sales?

3) Wiley’s Financial Accounting: Tools for Business Decision Making talks about trademarks in chapter nine. How would you determine the value of a trademark like Canada goose?

Posted February 12th, 2018 by Brent White & filed under Financial Accounting, Student life.

Description: Drivers at Oakhurst Dairy in the State of Maine are happy about a missing comma. Oakhurst Dairy has agreed to pay the drivers $5 million in overtime pay to settle a dispute over whether or not the dairy industry was exempt from the overtime provisions of a State law. Drivers had claimed the placement of a comma meant that they were entitled to receive overtime pay for anything in excess of 40 hours per week.

Date: February 09, 2018

Source: nytimes.com

Link: https://www.nytimes.com/2018/02/09/us/oxford-comma-maine.html

1) Has a grammar issue ever cost you on a university assignment?

2) What tips do you have on how to improve writing and grammar skills?

3) Look at the discussion on Provisions and Contingent Liabilities on page 533 in Wiley’s Financial Accounting: Tools for Business Decision Making. How might Oakhurst Dairy account for this legal dispute in its financial statements?

Posted February 5th, 2018 by Brent White & filed under Financial Reporting and Analysis.

Description: After years of less than spectacular results, and with most of its previous profits coming from its web services arm, Amazon seems to have busted through the retail profits barrier. Its fourth quarter profit was close to $2 billion, with a big helping hand from the latest US tax cut. Alexa seems to be helping out, with Amazon customers using the voice service to order items from the huge online retailer.

Date: February 01, 2018

Source: cbc.ca

Link: http://www.cbc.ca/news/business/amazon-earnings-retailer-1.4515393

1) Were you using Amazon during the holiday season to help with your purchasing?

2) Do you or any of your classmates use Alexa?

3) Take a look at problem BE 14-12 in Wiley’s Financial Accounting: Tools for Business Decision Making. The problem compares the P/E ratios and the dividend yield pf Amazon and Bank of Montreal. Answer the question posed by the problem regarding which company offers the best opportunity for growth and which for income.

Posted February 5th, 2018 by Brent White & filed under Ethics.

Description: There’s a new version of Monopoly now: Cheater’s Monopoly. That’s right, a version that let’s you cheat. The new set features 15 cheat cards that allow you to take advantage of the other players and to even steal from the bank. Now we know that some of our older siblings did that to us when we were kids. But apparently the new rules will allow it. If you get caught though, the new board has a plastic handcuff that can be used to secure a cheater – presumably until the law arrives.

Date: February 2, 2018

Source: thestar.com

Link: https://www.thestar.com/business/2018/02/02/new-monopoly-cheaters-edition-will-let-players-steal-from-bank-skip-spaces.html

1) Are you a fan of monopoly? If so, tell your classmates about one of your favourite memories from playing the game.

2) Do you think you would like to play this new version?

3) Do you think this board game could be used to teach university students about business ethics?

Posted February 5th, 2018 by Brent White & filed under Cost Accounting.

Description: Here come the lawsuits! Plus the government investigations. Apple is facing heat for slowing down old models of its popular phones in order to extend battery life. Apple has responded by promising new batteries for phone owners, though users are reporting Apple stores are running out of the replacement units.

Date: January 31, 2018

Source: nytimes.com

Link: https://www.nytimes.com/2018/01/31/technology/personaltech/iphone-battery-slowing-down.html

1) Have you ever experienced the Apple slowdown?

2) If you were a cost accountant, at Apple, how would you recommend that the costs of this issue be tracked for the decision-makers in Cupertino?

3) Page 259 of Wiley’s Financial Accounting: Tools for Business Decision Making contains a section called “Determining the Cost of an iPhone.” What portion of the cost do you think the battery comprises?