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.