Posted by & filed under Accounting Principles, Advanced Accounting, All Articles, Auditing, Cost Accounting, Financial Accounting, Financial Reporting and Analysis, Financial Statement Analysis, Fraud Accounting, IFRS, Intermediate Accounting, International Accounting, Managerial Accounting, Uncategorized, Video Updates.

The depreciation of the Brazilian real, which is the worst-performing major currency this year, may be helping reignite economic growth in Brazil after a “weak” first quarter of 2012. Economic growth in Brazil, the world’s sixth biggest economy, has been recovering more slowly than anticipated even as the government steps up interest rate cuts and reduces taxes. The country is also actively looking toward expanding its technology segment by attracting tech companies from around the world. Interestingly, in Facebook’s bid to go public, the company touted Brazil as one of its main growth drivers.

Questions:

1. According to the video, who makes up the “Geeks on A Plane” group?
2. According to the video, what percentage of Brazilians are connected to the Internet and what are the trends for the future?
3. According to the video and article, what factors are not attractive to Internet investors and venture capitalists who are thinking about starting operations in Brazil? Describe these in terms of costs.

Sources:

CNN Video. (2012) Brazil’s tech sector lures ‘geeks.’ CNN.com, May 21 (Retrievable online at www.cnn.com/videos)
Arai, A. and H. Marinho. (2012) Brazil Says Economic Growth Recovering After Weak First Quarter. Bloomberg.com, May 20 (Retrievable online at http://www.bloomberg.com/news/2012-05-18/brazil-2012-growth-recovering-after-weak-start-mantega-says-1-.html)

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The tornado that tore through Joplin, Missouri about a year ago ranks not only as the most deadly twister in six decades, but now has been declared the most costly since at least 1950.

Questions:

1. What percentage of the costs are insurance policies expected to cover and what percentage will likely be covered by federal and state government aid?

2. If a business had a piece of equipment (original cost $50,000 with accumulated depreciation of $20,000 and a fair value of $25,000), which was totally destroyed in the tornado but was insured for the fair value subject to a $500 deductible, what journal entry would it make to record the loss and receipt of insurance reimbursement?

3. Approximately how much money (in dollars) went toward contractors to haul off debris?

4. What costs mentioned in the article surprised you most? Explain.

Sources:

CNN Video (2012). After Tornado Joplin HS Moves to to Mall, May 21 (Retrievable online at www.cnn.com/videos)

Lieb, D. (2012). Records: Joplin Twister Was Costliest Since 1950. Insurance Journal, May 21 (Retrievable online at http://www.insurancejournal.com/news/midwest/2012/05/21/248250.htm)

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Mercedes-Benz has long been at the forefront of creating safer cars and now they are aiming to create safer drivers. In December 2011, the company opened the its first driving school in the U.S. called Mercedes-Benz Driving Academy. Mercedes has three more in Europe). This school is located on Third Street in downtown Los Angeles. Open to drivers of all ages, its primary focus is teenagers, who want to get their California driver’s licenses and drive Mercedes in the process. The cost of the academy’s integrated program is $1,390, which includes 15 hours of online training, 10 hours in the classroom, five hours of workshops and 16 hours of behind the wheel coaching. The driving schools that the Bloomberg video showed are typically more expensive and generally focus on defensive driving skills of more experienced drivers.

Questions:

1. Based on the video, what types of return investments do you think the luxury car makers are receiving from their “driving schools”?
2. What types of costs would be involved in the luxury car driving schools shown in the video?
3. Go to http://exoticsracing.com/ and customize your ultimate driving experience. What was the most interesting thing you noticed about this company?
4. For the Mercedes-Benz Driving Academy, what would be some fixed costs and what would be some variable costs? Can you think of any mixed costs that the company might have? Would these be different for Exotics Racing School?

Source:

Bloomberg Video. (2012). Extreme Test Drives, May 10.

Jorrey, K. (2012) Luxury car maker sets new standard for driving school. The Acorn, April 26 (Retrievable online at http://www.theacorn.com/news/2012-04-26/Business/Luxury_car_maker_sets_new_standard_for_driving_sch.html)

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On Monday, May 7, Yahoo apologized to its employees for discrepancies about its CEO, hired in January. Apparently, Scott Thompson, does not have a computer science degree after all, even though that information was included in an SEC filing and in several public bios about him.

Questions:

1. If Thompson allowed false information about his educational background to linger in his bio, should he be treated just like any other employee who did the same? Discuss.
2. Why didn’t this issue come up in a background investigation of the CEO before he was hired? Discuss.
3. What should Thompson have done if it truly was an error? Discuss.
4. Look at the slide show regarding padded resumes (at http://www.washingtonpost.com/business/economy/yahoo-ceo-isnt-the-only-leader-who-has-fudged-resume/2012/05/10/gIQARucmFU_gallery.html?tid=ts_biz#photo=1) What one thing surprised you most in this slide show?

Sources:
McGregor, J. (2012). Yahoo’s CEO Scott Thompson’s Incorrect Resume Raises Questions for Tech Company’s Board. The Washington Post, May 8 (Retrievable at http://www.washingtonpost.com/blogs/post-leadership/post/yahoo-ceo-scott-thompsons-incorrect-resume-raises-questions-for-tech-companys-board/2011/04/01/gIQAXUB5AU_blog.html)

Staff (2012). Yahoo CEO Isn’t the Only Leader Who Has Fudged Resume – Slide Show. The Washington Post, May 10 (Retrievable online at http://www.washingtonpost.com/business/economy/yahoo-ceo-isnt-the-only-leader-who-has-fudged-resume/2012/05/10/gIQARucmFU_gallery.html?tid=ts_biz#photo=1

Bloomberg Video (2012). Will CFO Tim Morse Head Yahoo?, May 9.

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Ninety-four percent of students who earn a bachelor’s degree borrow to pay for higher education. This is up from the 1993 statistics that show only 45 percent of students borrowed money to pay for a bachelor’s degree. This borrowing includes loans from the federal government, private lenders and relatives.

Questions:

1. Explain why Rajeev V. Date, deputy director of the Consumer Financial Protection Bureau, likens excessive student borrowing to risky mortgages. Do you agree or disagree? Discuss.
2. According to the article the average 2011 student debt is $23,300. Look at the interactive map and find your university. How does the 2010 debt for your university compare to this amount?
3. Go through all colleges for all years (2004-2010). What do you notice about the change in the distribution of the data over this period? Be as specific as possible.
4. Look at the related slide show about Kelsey Griffith (http://www.nytimes.com/slideshow/2012/05/13/business/20120513DEBT_SS.html?ref=business). How does her debt compare to the debt on the interactive map for her university?
5. Realistically, how much will Kelsey have to earn per month in order to live and pay back her student loan? What is the typical length of a school loan?

Sources:

Staff (2012). Student Debt at Colleges and Universities across the Nation, Interactive Map – The New York Times, May 12 (Retrievable online at http://www.nytimes.com/interactive/2012/05/13/business/student-debt-at-colleges-and-universities.html?ref=business)

Martin, A. and A. Lehren. (2012). A Generation Hobbled by the Soaring Cost of College. The New York Times, May 12 (Retrievable online at http://www.nytimes.com/2012/05/13/business/student-loans-weighing-down-a-generation-with-heavy-debt.html?_r=1)

Bloomberg Video. (2012) Student Loan Debt.

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This week, the House Committee on Oversight and Government Reform released information about the Transportation Security Administration wasting taxpayers’ money; this time they point to a Texas warehouse holding more than 5,000 pieces of security equipment, valued at upwards of $180 million.

Questions:

1. What percentage of equipment has been stored for more than one year?

2. Based on the information in the article and video, what recommendations would you make if you worked for the inspector general’s office?

3. Representative Issa thinks that the TSA has “cooked the books.” Based on your knowledge of accounting and red flags of fraud, do you agree or disagree? Provide your reasoning.

Source:

CNN videos. (2012). TSA Cooked the Books, CNN.com, May 9 (Retrievable online at www.cnn.com/video

Fox, L. (2012). TSA Puts Millions of Dollars of Equipment in Storage, U.S. News, May 9 (Retrievable online at http://www.usnews.com/news/articles/2012/05/09/tsa-puts-millions-of-dollars-of-equipment-in-storage)

Doctorow, C. (2012). TSA Waste and Corruption: The Greatest Hits, BoingBoing, May 9 (Retrievable online at http://boingboing.net/2012/05/09/tsa-waste-and-corruption-the.html)

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While it is traditionally rare for employee-shareholders to exercise their voting power, the winds may be shifting. According to Morgenson, employee-shareholders are banding together to vote against executive pay in this proxy season. Although she is not sure what actual impact their votes had, at Citigroup, shareholders as a group voted down the $15 million paycheck for Vikram Pandit.

Questions:

1. Based on Morgenson’s article, what employee-shareholder action is going on at Wal-Mart?
2. Based on Morgenson’s article, what employee-shareholder action is going on at Verizon?
3. What did you find to be the most interesting item in the article?

Source:

Morgenson, G. (2012). Employees, Too, Want a Say on the Boss’s Pay. The New York Times, April 21 (Retrievable online at http://www.nytimes.com/2012/04/22/business/employees-too-want-a-say-on-the-bosss-pay.html?_r=1&hp)

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Two years ago, Augie Hong, who works for an investment firm in San Francisco, awoke with severe abdominal pains. He went to an ER at the hospital closest to his house and was diagnosed with acute appendicitis. He wasn’t worried about the cost because he had health insurance from his employer. However, when he got the bill, it was $59,283, including $5,264 for the doctors. According to the Healthcare Blue Book, this amount was six times the fair price for his area.

Questions:

1. What is the range of fees for a routine appendectomy in California?
2. What was Mr. Hong’s mistake and what should he have done?
3. Under the Affordable Care Act, what are hospitals suppose to do by 2014?
4. What do experts advise consumers to do regarding hospital charges?

Source:

Rabin, R.C. (2012). The Confusion of Hospital Pricing. The New York Times, April 23 (Retrievable online at http://well.blogs.nytimes.com/2012/04/23/the-confusion-of-hospital-pricing/?ref=health)

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How low can you go? Otis Josey, a 54-year old Detroit man, allegedly told a pre-school girl that he worked at a radio station and was raising donations for a children’s hospital charity. In exchange for a donation, he would give the donor a gift card. Police say he literally cheated the 5-year old girl out of her $5 lunch money in exchange for a fake $20 gift card to Chuck E. Cheese.

Questions:

1. Read the article by Ray Martin. What is one of the most reported gift card scams?
2. What does Martin recommend that you should do with an unwanted gift card?
3. How do most companies recognize the revenue from gift cards? What journal entries are involved?

Sources:

NBC Video.(2012). Man accused of selling child fake Chuck E. Cheese gift card, NBC News, April 26 (Retrievable at http://video.msnbc.msn.com/nbc-news/47178295/#47178295)

Martin, R. (2011). Attention Shoppers: Avoid this Gift Card Scam. CBS News, December 15 (Retrievable online at http://www.cbsnews.com/8301-505145_162-57343690/attention-shoppers-avoid-this-gift-card-scam/)

Visit msnbc.com for breaking news, world news, and news about the economy

Posted by & filed under Accounting Principles, Advanced Accounting, All Articles, Auditing, Cost Accounting, Financial Accounting, Financial Reporting and Analysis, Financial Statement Analysis, Fraud Accounting, IFRS, Intermediate Accounting, International Accounting, Managerial Accounting, Uncategorized, Video Updates.

A hearing on an extravagant government conference in Las Vegas will enter its second day on Capitol Hill on Tuesday, April 17. During Monday’s session, a House committee heard from officials accused of wasting taxpayer money on fancy meals and over-the-top entertainment. The GSA inspector general, Brian Miller, says he believes the behavior he uncovered could possibly be criminal and he wants the Justice Department to investigate possible bribes and kickbacks.

Questions:

1. According to the video, what were some of the reasons for out-of-control spending?
2. Compare this government scandal to a similar corporate scandal. Discuss any differences or similarities.
3. What types of controls should have been in place to prevent this overspending situation?
4. What issues do identify as criminal offenses? Discuss.

Source:

MSNBC video. (2012). GSA Under Investigation for Frivolous Spending, April 16. (Retrievable online at http://www.msnbc.msn.com/id/31510813/ns/msnbc_tv-the_dylan_ratigan_show/#47066004)
Cordes, N. (2012). Bribes, kickbacks in GSA Scandal? CBS News, April 17 (Retrievable online at http://www.cbsnews.com/8301-505267_162-57415052/bribes-kickbacks-in-gsa-scandal/)

Visit msnbc.com for breaking news, world news, and news about the economy