Thursday, April 2, 2009

Accounting Blog

http://www.vancouversun.com/business/Vancouver+prices+fall+still+highest+Canadian+cities/1448940/story.html

Summary:
The article I read named “Vancouver gas prices fall, but still highest for Canadian cities”. The article is basely like a financial report that reports the gas prices during the last seven days. The average price of regular gasoline in Canada was 88.4 cents a liter, down 0.9 cent from a week ago. The biggest weekly rise was in Regina, where the average gasoline price went up 6.2 cents to 95.9 cents a liter. Saskatoon and Prince Alberta both saw their average prices rise 6.00 cents a liter to the same 95.9 cents in Regina. However, the lowest gas prices were in Ottawa, where the average fell 3.4 cents over the week to 79.3 cents. Both Toronto and London fell by 6.4 cents and both averaged 83.3 cents a liter. Back to Victoria and Vancouver, both their gas price edged down 0.1 cent to 0.2 cents, but compared to the rest of Canada, British Columbia still has the highest gas price.

Connection:
The connections between this article and the chapters in the book are different accounting ratios. As we known that the gasoline is a major expense in many companies. No matter big or small the companies are, if they need to transport out or in, they need to spend money on gasoline. To many large transport companies, the decreasing in gas price will make them reduce a huge portion in expenses, and all the accounting ratios that relate to the net income will also be influenced. That is because fewer expenses will make a higher net income. On the other hand, if the gas price is increasing, the expenses will also increase and this will cause the decreasing in net income. However, to some merchandisers, they only use a small amount of gasoline each month, so the up or down of gas price will not influence them by a lot.

Reflection:
Beside all the other financial reports, the gas price is another sensitive topic I cared most these days especially during economy recession. Before, I thought the gas price is like a symbol that reflects the value of Canadian dollar. From my observation, I discover when the gas price increases, the value of Canadian dollar will increase; when the gas price decreases, the value of Canadian dollar will also decrease too. It is because Canada is a natural resource county; it produces its own gas and even supplies the gas to other countries like United State. I still remember last summer when the gas price in Vancouver went up to 1.5 dollar per liter, and the exchange rate between Canadian dollar and US dollar was 1.2. However, the exchange rate now is going below 1.0, which means the US dollar is higher than Canadian dollar, and the gas price also drops. Therefore, it proves my observation is right and reasonable.

Thursday, March 12, 2009

Chapter 16 Blog

http://blog.seattletimes.nwsource.com/politicsnorthwest/2009/03/12/senate_passes_unemployment_ins.html

Summary:
The article I read named “Senate passes unemployment insurance bill” on The Seattle Times talks about a second proposal impacting the state’s unemployment insurance fund, this time benefiting businesses, passed on Senate on Tuesday night. This proposal, which calls for tapping into the state’s flush unemployment insurance fund to give unemployed workers an extra $45 per week, has already been signed into law by Gov. Chris Gregoire. No doubt, this is a good news to the employee who were apply for UI right now because after March 12, 2009 they can get extra $45 more per week. This is also a good new to the employers because this will make them much more competitive since more money will stay in their pockets of, and this is an important step. By the way, the Employment Security Department has been the focus of intense attention this legislative session because of the sheer size $4 billion unemployment fund is the country’s largest unemployment insurance trust. In addition, the state’s senate also passed a measure that would offer $15 million to $30 million to community and technical colleges for worker retraining.

Connection:

The connection between this article and Chapter 16 is the unemployment insurance (UI). Unemployment insurance is a federal program whereby eligible unemployed persons receive cash benefits for a specified period. These benefits are paid out of funds derived from employer, employee and government contributions. If a worker who has made sufficient contributions to the fund becomes unemployed while willing and able to accept employment, that worker is entitled to receive payments out of the fund. In Canada, the Emplyers’ Guide to Payroll Deductions states, “Calculate the premium at 1.4 times your employee’s premium.” Therefore, the employers need to pay a large portion of UI for employees too. However, in United States right now, the bill has just passed will help both the employees and employers a lot.

Reflection:

Since the economy does not do well, the unemployed rate increases by a lot. This indicates many people were laid off and need to apply for the unemployment insurance. Of course, this fund will help many people, and family to overtake this hard time. Like United State does, I think Canadian government maybe would also want to adjust something due our unemployment insurance fund to make our workers feel easier. Nobody knows this economy depression will last for how long, and no one knows there is going to be how many more workers facing layoff; all we know right now is beside we don’t have any income, the unemployment insurance will help us continue to live.

Monday, March 2, 2009

Chapter 15 Blog

http://www.financialpost.com/story.html?id=1288720

Summary:
This time the article I read named “Telus rings up 29% drop in Q4 profit”. This article talks about the second strongest telephone company- Telus, its profit dropped 29% in the Q4 profit. That is a huge dropping since the economic does not do well. Its profit dropped as it booked fewer tax-related gains and spent more on restructuring, but revenue rose stayed as strong as usual because of the company’s wireless business. The favorable tax-related adjustments of $32 million, compared with $143 million a year earlier. On the other hand, restructuring costs increased by $32 million, however, the company froze executive compensation, reduced some expenses and cut down management layers to maintain their profits as much as they can, but the profits still dropped a lot compared to a year before. In addition, the revenue rose 5.3% to $2.45 billion, fuelled by growth in wireless subscribers and the number of new high-speed Internet customers signed by dropped 27% compared with last year. Although revenue per subscriber fallen sharply, but more customers were sign up for feature-rich smartphones, which boosts data revenue.

Connection:
Chapters 15 in our textbook talks about compare different financial statements by using accounting ratio. From calculate different accounting ratios, we can determine how well a business operates. The two ratios connect between this article and chapter 15 is the rate of return on net sales ration and collection period ration. Rate of return one net sales ratio measures the dollars that remain after all expenses are deducted from net sales. Since Telus did not do well compared to last year or last 3 quarters, its net income will decrease, which means its rate of return on net sales will also decrease. However, there are more new customers sign up for new smartphones, high –speed internet, and those will cause increasing in collection period since we know most of our telephone bill paid after the month we used. The account receivables will increase and the collection period will also increase too.

Reflection:
The economy depression made many companies suffering a lot. The financial statements will not look as good as we expected due to the hard situation right now. Many companies try their best to keep the profits at a certain point by cutting down labors or decreasing the expenses. The debt percentages may increase and the equity ration may decrease. The current ratio will also be the one to decrease since the total assets of a company is decrease; its ability to pay the debts back is weaker than before. Due to the economy environment right now, my opinion is to try the best to keep your profits as much as you can, but do not take a risk to invest at this moment. Put yourself in a safe transition period until the economy looks better.

Tuesday, November 25, 2008

Chapter 14 blog

http://www.creditcards.com/credit-card-news/debt-collection-bad-economy-1265.php

Summary
The article I read has an interesting name called “Struggling debt collectors to debtors: Let's make a deal.” In our daily life, as some credit cards and some debt delinquencies haven raised, collecting on overdue and bad debt has declined sharply. The economic downturn and unemployment rate increases force many debt collectors to try some new strategies for getting money back.
Some new strategies are:
- Accepting down payments on amounts owed instead of demanding payment in full.
- Stretching out payments over several months to give debtors a chance to pay off their debts slowly.
- Negotiating to receive a fraction of the amount owed if paid within a week or 10 days.
- Offering to report the debt -- if paid quickly -- as "paid in full" on the credit report instead of as a settlement, which remains on a debtor's record for seven years.
However, not every new strategy is easy on debtor since many credit card agencies are taking legal action sooner and filing lawsuits to get court judgments up from rather than just waiting for the money.

Connection:
The connection between this article and chapter 14 is the word “credit card” since most information in chapter 14 is talking about credit card. Today, the use of credit card is gradually substituting the use of cash, people found the use of credit card is safe, convenience and easy. However, this also raises some problems, like the debtors do not pay the payments back in the designate period, some people use the advantage of credit card to overdraw and so on. These problems make credit card agencies really hard, so they try to make new strategies to change the situation right now.

Reflection:
Due to the economy situation right now, to create some new strategies mentioned above maybe is a good way to deal with the debt delinquencies. To extend the payment period, stretches out payments sometime do help the people with financial problems. I think another way to change this situation is the credit card agencies need to consider more on the applicants’ financial position when they apply for the credit cards. Make sure the applicants have the ability to pay the payments back is very important.

Wednesday, October 29, 2008

Chapter 12 Blog

http://www.cbc.ca/money/story/2008/10/27/toyotasales.html


Summary:
This time, the article I read on the http://www.cbc.ca/ is named “Toyota sales slip for the first time in seven years”. The world economy for the second half year of 2008 is dark. Stock prices fall, oil prices drop and everything relates to the money is affect by the economy situation right now. Toyota Motor Corp. is an example for that. Toyota Motor Corp. said on Monday its world sales fell in the July-September quarter, marking the first decline in seven years for the Japanese automobile maker. The company only sold 2.24 million between July to September, and it is down four per cent compares to the same three months in 2007. The reason caused sales decline is weakening U.S. demands. The Toyotas sales of September in U.S. fell thirty-two percent due to the economic recession. Previously, Toyota’s U.S. sales had been supported by demand for fuel-efficient vehicles. On the other hands, Toyota has been battling with General Motors Company for the top spot in global vehicle sales too. In 2007, General Motor’s group sales 9.37 million for total, and it is just ahead of Toyota’s sale of 9.366 million vehicles. Therefore, we can estimate the total sales of 2008 for Toyota Motor Corp. may below 9.366 million because the sales are suffered in the economy recessions now.

Connection:
The main connection between this article and the information in Chapter 12 in our textbook is the word “Sales Slip” as we can see in the title. In our textbook, Chapter 12 introduces five kinds journal entries include the Sales Journal. The source documents for sales journal are sales invoices, charge sales slips and credit invoices issued. Absolutely we know that the most common way people buy and pay for their cars is down payment. Down payment means a person will issue a cheque for the partly payments of his car when the first time he bought it, then issue the cheques every month until the day he paid all his car debt. Therefore, Toyota Motor Corp. must have sales journal for the cars it sales. The transaction entries for this will be debit the bank, account receivable, and credit the sales revenue, GST and PST payable. However, since the economy does not do very well right now, the sales of Toyota Motor Corp will decrease, which means there are less sales journal than before. In addition, the revenue will decrease too.

Reflection:
Sometimes, some people may pay full amounts of the cars’ payment when they buy them; so the transaction entries for that will be much simple and easier. Debit the bank, credit the sales revenue, GST and PST payable. You do not need to debit the account receivables since there are no down payments. The sales journal is a major journal that direct affects your revenue and your net income. Therefore, due to what article said its sales fell down to the bottom, which means its revenue for this year will fall down. However, the decreasing of the revenue does not mean it will have a net loss. The people who work for Toyota Motor Corp. should pay attention to their jobs right now because due to the economy situation right now, many companies are beginning to cut the employees.

Thursday, October 9, 2008

Chapter 11 blog

http://www.bcbusinessonline.ca/bcb/top-stories/2008/09/03/meeting-challenges


Summary:
The article I read on
www.bcbusinessonline.com by Peter Mitham talked about the challenges BC tourism will meet and the affects of convention centers and hoteliers. In this summer, a strong dollar, high fuel prices and economic storm clouds south of the border dogged B.C. tourism operators. The favorable exchange rates sent domestic travelers south of the border. In recent years, 80 per cent of B.C.’s foreign visitors came from U.S; however, since the US dollars were equal to the Canadian dollars, the visitors in U.S were no longer came to Canada. Therefore, these trends are going to make it very difficult for the convention business and hoteliers. Competition among small-scale convention centers is already a fierce battle, and the economic pressures gathering steam only promise to make it more so.

Connection:
The connection between the article and the information in the text is merchandising. As the article mentioned above, BC will lose a lot tourists from U.S since the exchange rates goes to 1:1. This will not only effect the convention centers and hoteliers, but also will effect the merchandisings in B.C. Many merchandisers in B.C. have their stores locate around the tourism places, but since the tourism rate went down, the merchandisers may not earn as much as they want. On the other hand, if the merchandisers will only made little amounts of sales, their gross profits will decrease.

Reflection:
The article above should attract the attentions of marketing departments in the companies. Before the tourism in B.C. will meet challenges, the people in marketing departmenst should make good plans in order to face the rescissions follow by. Especially to some merchandisers who have their stores around the tourism places or some merchandisers put their main forces on earning tourists’ money. By the way, the two plans any merchandisers can use are: first, you may decrease your inventories because you may not sale as much as before; second, you may want to design a good promotion plan in order to attract as many customers as you can.