Posted by & filed under Accounting Information Systems, Accounting Principles, Advanced Accounting, All Articles, Auditing, Cost Accounting, Ethical Dilemma, Financial Accounting, Fraud Accounting, Income Taxes, Intermediate Accounting, Managerial Accounting, Uncategorized, Video Updates.

CBS’s board of directors on Monday said they will not give former CEO Les Moonves any of the $150 million severance package he was due under to his employment contract, a decision that follows a months-long sexual misconduct probe.

Questions:
1. What was Les Moonves role at CBS?
2. What were the grounds for his termination?
3. How many accusers did he have?

Source:
Birnbaum, E. (2018). CBS board declines $120M severance for Les Moonves following sexual misconduct probe. The Hill, Dec.17 (Retrievable online at https://thehill.com/media/421783-cbs-board-declines-120-million-severance-for-les-moonves-following-sexual-misconduct)

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Sentinel Capital Partners’ new acquisition is Pet Supplies Plus (PSP), as of December 2018.

Questions:
1. What are the benefits for PSP of being acquired?
2. How old are the franchise and company-operated stores and where was the company established?
3. How widespread is the chain, geographically?
4. What are the benefits of the acquisition for Sentinel?

Source:
Pet Product News Staff. (2018).Pet Supplies Plus Acquired by Private Equity Firm. PPN, Dec. 13 (Retrievable online at http://www.petproductnews.com/News/Pet-Supplies-Plus-Acquired-by-Private-Equity-Firm/)

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According to Boing-Boing.net, sleep apnea, which is a fast-growing health complaint among Americans, has triggered a set of deceptive and unethical measures by US health insurers to shift the cost of CPAP machines through price gouging to the people who must use them to remain healthy.

Questions:
1. Calculate the percentage of the transaction that Cigna gets for filters and masks.
2. What service did Cigna provide to receive this percentage and how would you as the accountant record the transaction?
3. What was the most interesting thing you learned in this article?

Source:
Staff writer. (2018) Insurance companies gouge on CPAP machines and consumables, use wireless modems to spy on your usage. Boing – Boing.net., Nov. 23 (Retrievable online at https://boingboing.net/2018/11/23/costs-vs-care.html)

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Millennials have preferences for consumption that differ significantly from those of earlier generations because:
(a) they are anti-materialists and want less stuff.
(b) they are less well-off than members of earlier generations were when they were young.
(c) they have lower earnings, fewer assets, and less wealth.
(d) answer choices (b) and (c) are correct.

According to this article, economists with the Federal Reserve agree with answer (d).

Questions:
1. What did the Fed report say about “car-lessness?”
2. What do the Fed findings say about housing?
3. What do the Fed findings say about political views?
4. What was the most interesting thing you learned in this article?

Source:
Levitz, E. (2018). Millennials Aren’t Post-Consumerist, They’re Just Poor, Fed Finds. New York Magazine, Dec. 6 (Retrievable online at http://nymag.com/intelligencer/2018/12/federal-reserve-millennials-study-arent-post-consumerist-theyre-just-poor.html)

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According to the Washington Post, what started as an antitrust lawsuit brought by states over just two drugs in 2016 has exploded into an investigation of alleged price-fixing involving at least 16 companies and 300 drugs.

Questions:
1. What was the “shorthand” between executives used for? Give an example.
2. According to the article, who are the victims of these price-fixing schemes?
3. Who are some of the companies that banded together for price-fixing and what are some of the extraordinary percentage markups charged?
4. What did you find the most interesting about this article?

Source:
Rowland, C. (2018). Investigation of generic ‘cartel’ expands to 300 drugs. Washington Post, Dec. 9 (Retrievable online at https://www.washingtonpost.com/business/economy/investigation-of-generic-cartel-expands-to-300-drugs/2018/12/09/fb900e80-f708-11e8-863c-9e2f864d47e7_story.html)

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According to the Guardian, even hiking the minimum wage to $15 an hour and requiring health benefits, as San Francisco has done, hasn’t been enough to maintain a healthy heartbeat in the restaurant industry labor market, because the median price for a San Francisco rental is $4,550.

Questions:
1. In the article, Gwyneth Borden, executive director of the Golden Gate Restaurant Association, said the same trends have been taking a toll in other cities around the country. What are some of these cities? Do some research and find statistics on the costs of living of at least 3 of these cities and compare.
2. What are some of the new restaurant concepts that have been launched because of this labor shortage?
3. If this labor market problem limits the number and kinds of restaurant offerings in the Bay area, what are some of the other problems that you anticipate?

Source:
McCormick, E. (2018). San Francisco’s foodie scene suffers as its workers flee high cost of living. The Guardian, Dec. 10 (Retrievable online https://www.theguardian.com/us-news/2018/dec/09/san-franciscos-foodie-scene-suffers-as-its-workers-flee-high-cost-of-living)

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Cyber Monday proves to be the biggest shopping day ever! Because of this, according to Bloomberg, Cyber Monday may provide a big revenue boom for state and local governments.

Questions:
1. What is the reason for the big revenue boom for state and local governments?
2. According to Kroll Bond Rating Agency, how much revenue is Texas, New York and California expected to see?
3. Which states will benefit the most on a per-capita basis?

Source:
Moran, D. (2018). Cyber Monday Promises Big State Tax Boon Thanks to Supreme Court. Bloomberg, Nov. 26 (Retrievable online at https://www.bloomberg.com/news/articles/2018-11-26/cyber-monday-promises-big-state-tax-boon-thanks-to-supreme-court)

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Christian Louboutin’s trademark red-bottomed shoes have become iconic. Beyoncé wore a custom pair of boots for her Coachella performance and these shoes can cost hundreds or thousands of dollars.

Questions:
1. Where did Christian Louboutin get the idea for the red soles?
2. According to the article, what combination of factors makes the shoes so expensive?
3. What factors do you think that Christian Louboutin depends upon to stay in business?
4. Would you ever spend the money for Christian Louboutin’s shoes? When and why or why not?

Source:
Fierberg, E. (2018) Why Louboutin shoes are so expensive. Business Insider, Oct. 3 (Retrievable online at https://www.businessinsider.com/why-christian-louboutin-shoes-are-so-expensive-red-bottoms-heels-2018-9)

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According to the Washington Post, the bundle of financial incentives Wisconsin offered to lure Taiwanese technology giant Foxconn’s first major U.S. plant is larger than what New York, Virginia and Tennessee collectively pledged to Amazon.com, a comparison of the two development projects shows.

Questions:
1. Foxconn has said its $10-billion factory in southeastern Wisconsin will create how many jobs at what rate of pay?
2. In comparison, Amazon announced this week that New York, Virginia and Tennessee will split how many jobs at what rate of pay?
3. Make a comparison of tax credits and subsidies per project based on total inflow into each geographic area. Calculate the indirect jobs at half the pay of the direct jobs. Assume that Amazon will generate the same percentage of indirect jobs. Show your calculations.
4. Why is there the disparity between the average wages for the two projects – Foxconn vs. Amazon?

Source:
Paquette, D. (2018). Wisconsin offered Foxconn more than Virginia and New York did for Amazon. The Washington Post, Nov. 15 (Retrievable online at https://www.washingtonpost.com/business/2018/11/15/wisconsin-offered-foxconn-more-than-virginia-new-york-did-amazon/?noredirect=on&utm_term=.cf45b12bfd60)

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According to the New York Times, the Nissan chairman, Carlos Ghosn, was arrested on Monday after an internal company investigation found that he had underreported his compensation to the Japanese financial authorities for several years.

1. After Mr. Ghosn was sent to Nissan’s Japan headquarters, what was he credited with as a result of making sweeping changes?
2. According to the article, what do foreign investors typically tend to criticize Japanese companies about and why is this ironic?
3. What was the story that surrounded Proxinvest, a Paris-based shareholder advisory firm that had recommended voting against Mr. Ghosn’s 2017 salary?
4. How was the financial misconduct discovered?
5. Why is it assumed that there was collusion?

Source:
Rich, M. (2018). Carlos Ghosn, Nissan’s Chairman, Arrested Over Financial Misconduct. New York Times, Nov. 19 (Retrievable online at https://www.nytimes.com/2018/11/19/business/nissan-carlos-ghosn-misconduct.html)