Chapter 16 Payroll Accounting

http://columbiavalleynews.com/2010/04/10/bc-has-lowest-minimum-wage-highest-poverty-rate/

Summary

On March 31, 2010, Ontario increased their minimum wage to $10.25 an hour and on April 1, 2010, Nova Scotia will raise their minimum wage to $9.20 an hour. However, British Columbia seems to have no intention in increasing the minimum wage. British Columbia had not increased their minimum since 2001. Jim Sinclair said, “It’s time for the MLA and the Liberal caucus to accept their responsibility and speak on the behalf of their constituents and demand that the minimum wage to be increased to $10 an hour.” On the other hand, the government did mention that the economy is slow, 8% are unemployed, and they cannot afford it, when the economy is booming. The provincial government also said that other places have increased the minimum wage as a part of an anti-poverty strategy. BC has one of the highest poverty rates in the country…

Connection

Payroll process is very complex and the person in charge of payroll has a great deal of responsibility. For example, all the commission, minimum wage, government rules, and regulations must be kept in mind and be updated from time to time. When there are changes to rules ,such as minimum wage, they must be the first to know. When calculating a workers wage the paymaster must add commission and overtime and deduct taxes, CPP, etc. they also have to remember deduct the an amount if a worker has been late to work. The person that is in charge must update himself or herself with the new information, especially when the minimum has rose. Working at a different province means different rates and rules. Therefore, the paymaster does have to be organized and know what they are doing.

Reflection

British Columbia’s minimum wage maybe $8 an hour but for those who don’t have work experience or it is their first job the employer has the ability to pay them $6 an hour as training wages. Only after working for 500 hours in total then an employer must pay the employee a minimum of $8 an hour. Those who have a full time job and get paid minimum wage can hardly make a living with so little causing many of them to be over exhausted. They also have no choice but to do the job because they have no choice and are unable to keep up with living expenses. Rent, food, hydro may take up more than ¾ their wage. How much is left to put into a RRSP? As a student, I have always wanted to work part time but I feel that it is nonsense to have to work for 500 hours to obtain that $8 an hour. Does it actually take 500 hours to do well in one job? In my opinion, it is unfair that British Columbia has a training wage then minimum wage that is lower than the rest of Canada. British Columbia’s economy is certainly not the worse out of all the other provinces. If other provinces are increasing their minimum wage as an anti-poverty strategy, doesn’t it make sense that BC should do the same since BC has one of the lower poverty rates in the country.

Ch pater 15 Analyzing Financial Statements

http://www.vancouversun.com/business/Furniture+business+customer+rebound/2782008/story.html

Summary

Because of the recession, many businesses are not doing well as before. However, it seems that some business may be making their comeback. Furniture businesses have been doing better than expected. A few years back the sales at furniture/appliance stores dropped 7% because of the economy downfall but economic forecast predicts that there will be a 5.8% growth in 2010 and 4.2% in 2011. Leon’s Furniture reported earnings of 33¢ per share beating the analyst’s estimate. On the other hand the Brick Group did not do so well last year. Their sales fell during the first quarter of 2009. After a forced recapitalize The Brick brought in a new management team which helped the company.

Connection

In Chapter 15, we learned there are two groups of people who are interested in a company’s financial statements, insiders and outsiders. Insiders of a company study the financial statements thoroughly. They find out if their company is doing well or poorly and if the company is not in good terms, they need to find out where the problem is and what to do. In the article, The Brick found out their sales have dropped by comparing financial statements of previous years and changed their management group as quickly as possible. Profits are usually related to how well the management group is performing. In this case, the company finds that the management group quality is not up to their expectations and takes immediate action.

Reflection

It is great to see that some businesses are turning around and the economy going uphill again. As everything is picking up speed people may consider in investing in businesses and in my opinion why not invest into a furniture/ appliance business. They seem to be making progress and doing well after the recession. Analyst even predicts high increase in sales. Of course relying on only analyst to predict which company is better take a look at the financial statements and compare each company. Using the current ratio, rate of return on net sales etc. these ratio will determine if the company is able to pay debt, the amount of money that remains after all expenses are deducted, etc. After thorough analysis determine then which company to invest.

Chapter 14 Cash Control and Banking

http://www.torontosun.com/news/torontoandgta/2010/03/18/13279486.html

Summary

Dr. Christopher Pinto arrived at his office to find the door locks have changed. Because he needed his tools and prescription pad in order to do his job, many sick patients were waiting outside the office. Just at the beginning of the month, his office was broken into and stole the petty cash and rent cheques. Dr. Christopher Pinto claims that he will pay the rent on Thursday when he spoke with his landlord on Wednesday. However, the locks to his office were changed overnight.

Connection

In Chapter 14 we learned that a petty cash fund is a small quantity of cash usually no more than $200. This is in the office for expenses and small expenditures. In the article, someone decides to break into an office to steal petty cash and cheques that he or she may not be able to cash in. There is also no guarantee that an office would have petty cash. Going through all this trouble to get 100-200 dollars from an office is a little too much. On the other hand, if there was cash in an office should not it be kept in a safe and obscure place to prevent theft. Having an honest and trustworthy person to handle petty cash is safe but keeping the cash in a good hiding place is also important.

Reflection

After promising to pay for the rent the very next day the landlord should’ve have waited before changing the locks to the office. The property owner seemed cold hearted to change the locks knowing that Pinto is a doctor and there are many sick patients waiting for him. It is unfair to the doctor because he said he would pay the rent the next day. There is not any trust between the property owner and the renter, who may does not make a healthy relation between the two. In the future if I were to find a place to rent, I would not want to meet someone who is cruel and changes the locks to my home because I missed the payment by a day or two.

Chapter 12 Specialized Journals

http://ezinearticles.com/?Do-You-Know-How-to-Manage-and-Control-Your-Business-During-the-Recession?&id=3502220

Summary:

This article talks about the writer’s opinion on how she thinks the business should operate during these hard time. In the article, she provides a few ways to help the business. Minimizing costs and maximizing efficiency are the two main points she talks about. Looking at expenses and see if any reduction can be made is a way to minimize costs. On the other hand, businesses would want to offer credits because other businesses are at hard times too, but also offer cash discounts. By offering these items, other businesses will be more likely to choose your business. This will allow the business to increase cash flow. The writer also states that if find risks they should be eliminated as soon as possible.

Connection:

The connection I made with this article and this chapter is when she wrote; give discounts for early payments as incentives for your suppliers to pay you early. In this chapter we learned that some companies offer cash discounts is to encourage customers to pay on time. One of the reason for this is the company can increase cash flow and have money to pay for their bills. Offering these discounts other companies will save money during these times and the company offering the discount will be able to have money to keep his business running. Both companies benefit from this situation even though the company offering the discount is not earning as much as before.

Reflection:

This article seems to have some very good ideas on how to survive during the recession. I agree on how the writer says offering discounts and finding ways to reduce expenses. Something that I did not like that much is when she says limit any risks. From what I learned the greater the risk the greater the profit. Even though the economy isn’t doing so well, taking a risk may aid the company. During these time customers are trying to save as much money possible. A way to attract customers is to stand out. Be different and take the chance because if everything is similar what are the chances of your company succeeding? In my opinion, risks are good. Depending on the company, whether or not they have the ability deal with the risk they take.

Cahpter 11 Accounting for a Mechandise Business

Summary

In this article, this retailer is willing to have incredible discounts for customers because of competition. As their competitors are lowering the prices and giving out discounts, they must do the same. Another reason that they are willing to sell at this rate is that they want to clear out their inventory of winter and fall merchandise before having to restock. Making exceptional sales and crazy discounts hoping that they would be able to lure customers in their store, so they can clear out the older merchandise, and make a profit before ordering new selections.

Connection

Chapter 11 is about how a store is able to calculate the amount merchandise sold and how much merchandise inventory is left, using the equation: cost of beginning inventory + cost of merchandise purchased- cost of merchandise sold= cost of ending inventory. If any retailer is able to easily clear out their inventory space before purchasing new merchandise it would make accounting much easier, but the retailer itself would find it hard to continue its business. Making deals for the consumers is great and clearing the inventory sounds simple, but how much time would it take before another season arrives and other stores have already filled in their order forms for new merchandise. All in one I think that clearing out the inventory is a little harder than it sounds.

Reflection

Lowering the price for the consumers is awesome. Having the sales extend just benefit the public. At times when I see stores having discounts at incredible rates make me wonder, how much they actually earn if the product was at its original price. Keeping in mind that retailers still earn profit to cover their expenses, therefore the original price would have been making larger profit even though it ranges from a longer period. After reading the article, I find that having more competitors for the same retailing, business would benefit the consumer, in the way that we are able to have better service and greater selection of stores.

http://www.vancouversun.com/life/wear+retailers+still+offer+Boxing+bargains/1124425/story.html

Jessica

Summary

Summary

HST, harmonized sales tax, is a tax that merges both the GST and PST together to create a 12% on goods and services. The government says that it will help create extra costs for businesses and consumers, but many people strongly oppose it. This new tax will not only apply to the goods and services that once applied to GST and PST. For example frozen pizza in a grocery shop does not subject to PST only GST but ion July 1, 2010 it will be subject to HST. Because of this, many people believe that it will make a difference in their day-to-day spending.

Connections

In Accounting 11, we learned that GST and PST are deal differently. PST is a sales tax charged to customers and put into an account called the PST Payable. It then is remit to the provincial government periodically. The GST on the other hand, is similar to the PST but it remit to the federal government. GST affects the GST Recoverable and the GST Payable. As shown above the two taxes are very troublesome having to take care of so many accounts, but in July 1 2010, there will be no longer GST and PST but HST. Wouldn’t taking care of one tax be less time efficient than two?

Reflection

Honestly, I can see the reason why nine out of ten people dislike this tax. Although the government says that, this tax will help the economy to become more competitive but I do not see how it will help. Many items are PST free but when the HST is out people would have to pay the whole 12%. In my perspective, this tax will affect many restaurant businesses because it use to be 7% on the bill but soon it will be 12%, but also keeping in mind that there should be a 10% tip. All this will have a great impact on the business because many consumers may not want to pay so many other fees for one simply meal.

http://www.vancouversun.com/news/British+Columbians+overwhelmingly+reject+harmonized/1865273/story.html