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