Wiley Accounting Updates

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?

Posted January 29th, 2018 by Brent White & filed under Contemporary Business Issues, Managerial Accounting.

Description: I wonder if they had to do it over again if they may have handled things differently? Tim Hortons, that is. With store owners implementing unpopular cost-cutting policies in the wake of Ontario’s bump in the minimum wage rate, Canadians have taken to holding protests outside of Canada’s favourite coffee shop. Dalhousie University professor Sylvain Charlebois notes that Tim Hortons may become less and less Canadian as its parent company takes the coffee chain international.

Date: January 23, 2018; updated January 24, 2018

Source: thechronicleherald.ca

Link: http://thechronicleherald.ca/business/1539303-commentary-tim-hortons-slowly-stripped-of-its-canadian-character

1) Did you happen to run into any of these protests at Tim Hortons where you live? What impact did it seem to be having on the restaurant?

2) How could you use your accounting skills to calculate the cost of a protest like this?

3) If you owned a Tim Hortons store, how would you address the protestors?

Posted January 29th, 2018 by Brent White & filed under Accounting Principles, Canadian Economy.

Description: Canada’s inflation rate was down to 1.9% in December. One big factor appears to be a slow down in gasoline price increases. Another was a short price war on cellphone plans sparked by Shaw cutting consumer costs on some of its offerings. When other large carriers followed suit, consumers benefitted, as long as they didn’t mind standing in line for the new rates.

Date: January 26, 2018

Source: cbc.ca

Link: http://www.cbc.ca/news/business/inflation-rate-december-1.4505086

1) Did you get to take advantage of any of the reductions in cellphone plan rates?

2) Check out the comparison of inventory costing methods in Illustration 6.6 of Wiley’s Financial Accounting: Tools for Business Decision Making. Which inventory costing method gives the “best” figure for ending inventory when prices are rising?

3) Canada’s inflation rate is low. But countries can face situations where inflation rises dramaticaly. This is known as hyperinflation. Search for this term in Wiley’s Advanced Accounting where you can read about special provisions for handling this situation when translating foreign currency in preparing financial statements.

Posted January 29th, 2018 by Brent White & filed under eCommerce, Managerial Accounting.

Description: With Bitcoin grabbing so many headlines lately with its dramatic rise in price, accompanied by a fall back towards $10,000 per unit, some are focusing attention on the costs of creating it. The so-called mining process that generates new bitcoin requires a shocking amount of computer power with some miners setting up server farms to earn the bitcoin rewards. The computing power in turn consumes large amounts of electricity with an estimate that the amount of electricity to generate one bitcoin is equivalent to what the average American home would consume in two years.

Date: January 26, 2018

Source: thestar.com

Link: https://www.thestar.com/business/tech_news/2018/01/26/bitcoins-staggering-energy-consumption-increases-along-with-prices.html

1) Have you ever attempted bitcoin mining?

2) Were you surprised by the high energy cost of generating bitcoin?

3) Using the techniques from Wiley’s Managerial Accounting: Tools fro Business Decision Making calculate the contribution margin per each unit of bitcoin generated at current prices.

Posted January 22nd, 2018 by Brent White & filed under Canadian governments, Contemporary Business Issues.

Description: Red tape continues to be a problem in Canadian jurisdictions. Perhaps the most humorous is a requirement in Quebec to post a notice to tell employees you are about to post a notice. This is among the finalists for Paperweight Award, an annual ‘competition’ sponsored by the Canadian Federation of Independent Businesses to highlight how government intervention in commerce can weigh down business activity. Other finalists include a two-page form for a lemonade stand and the New Brunswick government’s pursuit of Gerard Comeau all the way to the Supreme Court of Canada to try and overturn previous court victories Comeau had won in his attempt to bring more than 12 beer across the Quebec border and back to his New Brunswick home.

Date: January 18, 2018

Source: bnn.ca

Link: https://www.bnn.ca/death-by-1-000-paper-cuts-the-silliest-examples-of-red-tape-affecting-canadian-businesses-in-2018-1.971522

1) Have you ever run into government red tape that you could nominate for the Paperweight Award?

2) How could you calculate the cost of a regulation on a business?

3) In Section 1.7 of Wiley’s Auditing: A Practical Approach you can read about various types of regulation over the auditing profession in Canada. What impact do these regulators have on the audit process and the cost of audit services?

Posted January 22nd, 2018 by Brent White & filed under Financial Accounting.

Description: Private profits and socialized losses. That’s how columnist Jen Gerson refers to the collapse of pension benefits for former Sears employees and the Ontario government’s response of a Pension Benefits Guarantee Fund. The Fund means the taxpayer steps in to guarantee a minimum level of pension benefits for underfunded pensions. Meanwhile, during better times, Sears executives received bonuses and shareholders collected dividends while Sears underfunded employee pension funds. As Gerson says, maybe it’s time for a law that forbids such payouts unless pensions are fully funded.

Date: January 14, 2018

Source: nationalpost.com

Link: http://nationalpost.com/news/canada/jen-gerson-sears-canadas-legacy-private-profits-and-socialized-losses

1) Have you or anyone one you know been caught in the pension problems at Sears? How would you deal with such an impact on your personal finances if this did happen to you?

2) What do you think about the possibility of a law that forbid executive bonuses or dividend payments to shareholders if pension funds were not fully funded?

3) Wiley’s Financial Accounting: Tools for Business Decision-Making describes how you would write-off an account from a company that could not pay its debts, such as a bankrupt company. How would you record this write-off in the general journal?

Posted January 22nd, 2018 by Brent White & filed under Canadian Economy, Student life.

Description: The major banks in Canada have raised their interest rates following the Bank of Canada’s third recent increase in its lending rate to 1.25%. With positive economic growth and healthy employment levels, the Bank of Canada believed it was a suitable time to raise rates. Lurking in the background, however, is the possibility of failure in the NAFTA trade talks. One economist, Avery Shenfeld, noted that the possibility of NAFTA going south “hints that the view out the front window isn’t quite as sunny.”

Date: January 17, 2018

Source: CBC.ca

Link: http://www.cbc.ca/news/business/bank-of-canada-rate-decision-1.4490918

1) Using the calculator attached to the CBC article, or a spreadsheet template of your own, determine how a 0.25% rise in the rates might impact payments on your student loans.

2) Have you been following any of the news around NAFTA? What do you think will happen?

3) What happens to bond prices when interest rates are rising?

Posted January 15th, 2018 by Brent White & filed under Marketing & Strategy.

Description: Last week saw lots of buzz in Vegas as tech-fanciers and manufacturers hit town for the annual Consumer Electronics Show. Technology product editor Todd Haselton wrote that it appears to him that the focus of the show has been evolving. No longer do attendees see electronics – perhaps a new laptop or smartphone – that are just about to hit the market. Rather, he notes, the show has been shifting from an emphasis on stuff that people can buy and more towards ideas and “proof of concept.”

Date: January 12, 2018

Source: cnbc.com

Link: https://www.cnbc.com/2018/01/12/ces-2018-wrap-up-opinion-its-no-longer-about-the-consumer.html

1) Have you or any of your classmates ever attended the annual Consumer Electronics Show in Las Vegas? If so, describe the experience.

2) From a strategic marketing point of view, why do you think we may have seen this change in emphasis at the Consumer Electronics Show?

3) If you were an accountant working for one of the companies displaying goods at the Consumer Electronics Show, what account would you charge your organization’s expenses for the show to? For example, would it be marketing? Could it be considered as research?