Bye-bye Loopholes! You will be missed!

Posted by & filed under Accounting Information Systems, Accounting Principles, Auditing, Cost Accounting, Financial Accounting, Intermediate Accounting, Managerial Accounting, Video Updates.

Keep an eye out for three retirement loopholes that the government may close shortly. They have become increasingly popular as financial advisers have learned how to exploit kinks in the law.

Questions:
1. Who benefits from the Back-door Roth IRA conversions and how does this work?
2. What bothers lawmakers about “the stretch IRA?”
3. Who benefits from the agressive social security strategies mentioned and how does this work?
4. How soon are these loopholes expected to be closed?

Source:
Weston, L. (2015). 3 Retirement Loopholes That Are Likely to Close. CNN Money, June 30 (Retrievable online at http://time.com/money/3941695/retirement-loopholes/)

Innovation, Price Fixing, or Rotten Apples?

Posted by & filed under Accounting Information Systems, Accounting Principles, Advanced Accounting, All Articles, Auditing, Cost Accounting, Financial Accounting, Intermediate Accounting, International Accounting, Managerial Accounting.

Recently, a federal appeals court upheld a ruling whereby Apple was determined to be the leader of an industrywide conspiracy among book publishers. Their goal was to raise prices of digital books.

Questions:
1. When was the original case brought?
2. What were the damaging words in the case and who are these attributed to?
3. What division of the Justice Department prosecutes this type of case?
4. What does the terminology “horizontal conspiracy” mean?

Source:
Chen, B.X. (2015) Ruling That Apple Led E-Book Pricing Conspiracy Is Upheld. The New York Times, June 30 (Retrievable online at http://www.nytimes.com/2015/07/01/technology/ruling-that-apple-led-e-book-pricing-conspiracy-is-upheld.html?module=WatchingPortal&region=c-column-middle-span-region&pgType=Homepage&action=click&mediaId=none&state=standard&contentPlacement=1&version=internal&contentCollection=www.nytimes.com&contentId=http%3A%2F%2Fwww.nytimes.com%2F2015%2F07%2F01%2Ftechnology%2Fruling-that-apple-led-e-book-pricing-conspiracy-is-upheld.html&eventName=Watching-article-click&_r=1)

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So the 20% charge is not a tip?

Posted by & filed under Accounting Information Systems, Accounting Principles, Auditing, Cost Accounting, Financial Accounting, Intermediate Accounting, Managerial Accounting.

The restaurant, Per Se, must distribute $500,000 in compensation to current and former employees as ordered by the settlement struck with the New York Attorney General. The Manhattan eatery is notable for its $300-plus prix-fixe menus.

Questions:
1. How did the restaurant violate New York labor law and how did they remedy this situation for the future?
2. How much does the average waiter make per year at Per Se, according to the article?
3. What types of general ledger accounts did the 20% service fee pay?

Source:
Lewis, C. (2015). One Of America’s Priciest Restaurants Short-Changed Its Servers On Tips. BuzzFeed.com, July 2 (Retrievable online at http://www.buzzfeed.com/coralewis/pricy-restaurant-short-changed-staff-on-tips#.xoOZbzBlb)
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China Woes

Posted by & filed under Accounting Information Systems, Accounting Principles, Advanced Accounting, All Articles, Auditing, Cost Accounting, Financial Accounting, IFRS, Intermediate Accounting, International Accounting, Managerial Accounting.

This will be a make-or-break week for the Chinese stock market, after officials rolled out an unprecedented series of steps this weekend to prevent a stock market crash that would hurt the world’s second-largest economy.

Questions:
1. What has the Chinese stock market done in the last 3 weeks?
2. What will the suspension of IPOs do for the market in the near term?
3. What was the purpose of the surprise interest rate cut by China’s central bank last week?

Source:
Sweeney, P. and S. Shen. (2015).China rolls out emergency measures to prevent stock market crash, Reuters.com, July 5 (Retrievable online at http://www.reuters.com/article/2015/07/05/us-china-markets-outlook-idUSKCN0PF0DH20150705)
Investors talk in front of an electronic board showing stock information, filled with green figures indicating falling prices, at a brokerage house in Nantong

Another Bubble?

Posted by & filed under Accounting Information Systems, Accounting Principles, Advanced Accounting, Auditing, Cost Accounting, Financial Accounting, Intermediate Accounting, Managerial Accounting, Uncategorized.

Airbnb’s latest financing round is being led by private equity firm General Atlantic, and includes Hillhouse Capital Group, a Chinese fund manager, and Tiger Global Management, which just led a big $80 million financing for Postmates. The deal is expected to be officially announced today, Monday, June 29.

Questions:
1. What is a “private IPO”?
2. What is Airbnb and what does the company do?
3. What is Airbnb’s track record on profits and what is the company’s projected profit for this year?
4. What potential hurdles does the company face?

Source:

CNN Staff. (2015). ‘Crazy money’ – Airbnb valued at over $25 billion. CNN Money, June 27 (Retrievable online at http://money.cnn.com/2015/06/27/technology/airbnb-funding-valuation-update/)
Proxy fight

A Bizarre Story: Watch what you say!

Posted by & filed under Accounting Information Systems, Accounting Principles, All Articles, Auditing, Cost Accounting, Financial Accounting, Intermediate Accounting, Managerial Accounting.

A man having a colonoscopy sued two doctors and their practices for defamation and medical malpractice last week, after he found that his cell phone had recorded a most horrific “trash talking” event during his procedure, as well as evidence of a falsified diagnosis. In the trial, the jury ordered the anesthesiologist and her practice to pay the patient $500,000.

Questions:
1. While this trial paid the patient damages, do you think that the medical board should intervene with disciplinary action also, and if so what type of action?
2. How should the practice record the journal entry for the $500,000?
3. The jury awarded the man $100,000 for defamation — $50,000 each for the comments about the man having syphilis and tuberculosis — and $200,000 for medical malpractice, as well as the $200,000 in punitive damages. Explain the legal terms that are bolded.

4. What type of ethical oaths apply to the medical profession? Are they similar to the accounting profession? Explain.

Source:

Jackman, T. (2015). Anesthesiologist trashes sedated patient — and it ends up costing her. The Washington Post, June 23 (Retrievable online at http://www.washingtonpost.com/local/anesthesiologist-trashes-sedated-patient-jury-orders-her-to-pay-500000/2015/06/23/cae05c00-18f3-11e5-ab92-c75ae6ab94b5_story.html)

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More Woes in Greece

Posted by & filed under Accounting Information Systems, Accounting Principles, Auditing, Cost Accounting, Financial Accounting, IFRS, Intermediate Accounting, International Accounting, Managerial Accounting, Video Updates.

Greece will close its banks on Monday to try to avert financial collapse. The anticipated closure is expected to last about a week. This temporary decision was made along with keeping the stock market closed on Monday after the European Central Bank said it would not expand an emergency loan program to prop up Greek banks. The government has been trying to reach a new debt deal with international creditors.

Questions:

1. In 2013, what other country took similar measures as Greece is doing to avoid a bank collapse?
2. In a short paragraph, explain why this run on the banks is happening.
3. Approximately how much does Greece owe to the European Central Bank and the IMF?

Source:

Thomas, L. and N. Kitsantonis. (2015). Greece Will Close Banks to Stem Flood of Withdrawals. The New York Times, June 28 (Retrievable online at http://www.nytimes.com/2015/06/29/business/greek-debt-crisis-european-central-bank.html?_r=0)

Shaking up Pricing

Posted by & filed under Accounting Information Systems, Accounting Principles, Auditing, Cost Accounting, Financial Accounting, Intermediate Accounting, Managerial Accounting, Uncategorized.

Because the costs of health-care are rising, along with higher insurance deductibles and co-pays, the way medical services are being delivered is changing.
unlike hospital ERs and urgent care centers, retailers, such as grocery and drugstore chains, who operate in-store clinics are displaying pricing information upfront for consumers paying cash.

Questions:
1. What are the benefits of these types of delivery changes for consumers?
2. What are the benefits of these types of delivery changes for physicians?
3. What is the current growth projection of these types of retail clinics for 2016?

Source:

Harris-Taylor, M. (2015) Clinics in stores, cash-only doctors shake up pricing. The Toledo Blade, June 22 (Retrievable online at http://www.toledoblade.com/Medical/2015/06/22/Clinics-in-stores-cash-only-doctors-shake-up-pricing.html)

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Unlimited Data Slowdown at AT&T

Posted by & filed under Accounting Information Systems, Accounting Principles, All Articles, Auditing, Cost Accounting, Financial Accounting, Intermediate Accounting, Managerial Accounting, Video Updates.

The FCC accused AT&T of improperly slowing down Internet speeds for customers who had signed up for “unlimited” data plans and imposed a $100 million fine on June 17.

Questions:
1. How long has this practice been impacting customers?
2. Has the company violated FCC rules for similar issues prior to this current one?
3. Why has this action come at a particularly bad time for AT&T?
4. Discuss the costs/benefits and legitimacy of this practice in managing networks.

Source:
Fung, B. (2015). AT&T just got hit with a $100 million fine after slowing down its ‘unlimited’ data. The Washington Post, June 17 (Retrievable online at http://www.washingtonpost.com/blogs/the-switch/wp/2015/06/17/att-just-got-hit-with-a-100-million-fine-after-slowing-down-its-unlimited-data/?hpid=z1)

Uber: Employees or Contractors?

Posted by & filed under Accounting Information Systems, Accounting Principles, Auditing, Cost Accounting, Financial Accounting, Intermediate Accounting, Managerial Accounting, Video Updates.

The California Labor Commission has found that a driver for Uber in San Francisco is an employee of the company.

Questions:
1. Why is this such a nightmare for Uber?
2. Discuss how this will change the company’s accounting system and business model if this ruling is upheld and the costs involved.
3. The article talks about the 1099 economy and the importance of addressing this issue. In a paragraph, explain the term 1099 economy and why this case is so important. Give examples of other industries.

Source:
Griswald, A. (2015). A California Labor Ruling Just Said an Uber Driver Is an Employee. That’s Uber’s Worst Nightmare. Slate.com, June 17
(Retrievable online at http://www.slate.com/blogs/moneybox/2015/06/17/uber_drivers_ruled_employees_by_california_labor_commission.html)