Economics 12 Chapter Seven

Accounting 12 Chapter 16

Pizza chain fined for not paying wages

Link: http://www.cbc.ca/canada/toronto/story/2008/10/30/amato-fine.html

Summary

This article talks about a pizza chain in Toronto called Amato Pizza fails to pay workers for more than three years. They have been given one of the biggest fines ever over unpaid wages. Amato Pizza and its owners were fined more than $300,000 for failing to pay wages owed to six employees. One worker was owed $17,000 in pay and overtime throughout the years. The Ontario Court of Justice found the company "committed numerous violations of the Employment Standards Act in connection with wages owed to former employees. It's been told that the workers were legitimately owed $42,000 in pay from 2005 that the company wouldn't pay. Lawyer Mary Gallatly of Parkdale Legal Services, who represented the employees, said the fine sends a message to employers.She also mentioned that "It's nice to see, finally, the government beginning to take action against employers, like Amato's, who have been going on for years not paying workers' wages, it's excellent that these guys were brought up and finally prosecuted."

Connections

Wages and Salaries were the connections I made between the article and chapter 16. In the chapter it also talks about the process of a company recording the salaries and wages expenses in the books. In this case, Amato Pizza chain fails to follow the Employment Standards Act and went on without paying workers for years. In the chapter it is stated that a salary and wage is a fixed sum of money paid to an employee on a regular basis over a period of time. Salary is usually paid every two weeks. People who are paid by salaries are usually contract workers. A second type of payment that employers pay their employees is wages. This payment is paid according to hourly, daily, or weekly basis and the quantity of goods the workers produce. It is mentioned that salaries and wages can be decreased if the employee isn't up to standards for what they are getting paid. However, this wasn't the case for Amato Pizza.

Reflection

I understand that due to world's economy and recession, business can get pretty tough sometimes. However, leaving workers unpaid for the job they did, definitly isn't the right thing to do. Like many other businesses have done recently, Amato Pizza could have cut jobs of their more inexperienced workers in order to save money, while keeping their excellent employees happy by maintaining their salaries. Moreover, it is against the law for not paying workers. I believe that it is morally wrong to have income floating in yet making worker and employees suffer from not getting paid.

Economics 12 Chapter Six

Canada's GDP continues to slide, worst since 2003

Link: http://www.cbc.ca/money/story/2009/01/30/canada-gdp-december.html

Summary

This article talks about how Canada's economy continued its slide in November as the country's economic output shrank by 0.7%. It also mentioned how in August, the Canadian economy slipped 0.5%, this is an indication that a financial slowdown had already hit Canada prior to the credit meltdown that really began in mid September. Due to this, the country's goods producers were particularly hard hit in the past few months. Employment among these industries had already fallen more than 32,000,compared December 2008. Moreover, building trades were down 1.2% in November, it was an acceleration in the sector's downward slide as construction activity had decreased by 0.3% already in the previous months. Economists were already geared up for a contraction in the country's up coming quarters, estimating GDP will continue to drop. Analysts said that November's decline was one of the worst in the decade. For the year, Canada's GDP is expected to have barely moved the growth meter, increasing by 0.6%. By comparison, growth was 2.7% in 2007, a period when Canada was already entering into an economic slowdown.

Connections

Chapter 6 talks about GDP and aggregate demand, such as disposable income, government spending, investment, exports, imports and other factors that affects the economy. The article mentioned that Canada's GDP is continuing to drop, how we're entering a recession and many industries are affected due to employments, people spendings and etc. Without consumers spending, many business and industires are cutting back on productions or laying off employees to maintain their profit. Moreover, as of right now, unemployment is consider a major concerns for many Canadians, and due to this citizen's disposable income is decreasing. Which means many people are saving instead of spending. This will affect the GDP to drop even more and the economy could sink into a deeper recession stage.

Reflection

This was no surprise to me that people are saving instead of spending. I believe it is because many people are losing their jobs and they feel insecure about spending. If business stop laying off so many people or if banks starts lowering interest rates, it will motivate people to spend more and invest again into real esates and other goods and services. This would be an ideal way to get out of the recession/ crisis. However, this wouldn’t be something that can change overnight, it needs people to work to together and go throught this togehter.

Accounting 12 Chapter 15

Toyota seeks government loan

Link: http://money.cnn.com/2009/03/03/autos/toyota_govt_loan.reut/index.htm?postversion=2009030307

Summary

The world's top automaker Toyota Motor Corp applies for a $2.1 billion loan backed by the Japanese government to keep its finance arm competitive, since Toyota is facing an operating loss of $4.6 billion this business year. Yasuaki Iwamoto, an analyst at Okasan Securities said "Toyota is not in danger. It's out to get the lowest price for funding that the strength of its credit can get," "On the balance sheet, it doesn't matter if the funds are private or public." The cost of debt at the world's top automaker has gone up in the past year, Toyota Finance sold a five-year bond in December offering a subscriber's yield of 1.248%, up from 1.106% for debt in the same maturity sold in April 2008. However, Toyota is still in a much better position than its competitors, which have a higher percentage of loans in arrears. One great example would be Finance company GMAC, the main lender to struggling automaker General Motors Corp, has been hit by losses in its auto and mortgage units with more than billions of dollars lost. They're still surviving today due to the $6 billion government bailout in December and a ticket to tap lower-cost funding.

Connections

Chapter 15 talks about the "Analyzing Financial Statements", and this article relates to the chapter because,insiders and outsiders read the financial statement to determine if the business will be able to repay the loan. In the chapter, we also learn how to compare financial data, and work out different ratios and percentages. In the situation in our article, Toyota applied for a loan from the Japanese government. In order for the loan to go through, the government would have to analyze Toyota's financial statements to make sure they have the abilities to pay back the loan.

Reflection

Due to global economy falling, I think that the banks and government must examine each company before they put out massive loans and bailouts. Many companies are now on the border line of surviving. Government and banks should think twice before making any decisions. I believe that helping certain compaines out would help and save the economy. Yet, at the same time, they have to make sure those loans and bailouts will make a differences in the end.

Economics 12 Chapter Four

Alberta's April 7 budget to contain small spending increase

Link: http://ca.news.yahoo.com/s/capress/090226/national/alta_fiscal_update

Summary

This article talks about how Alberta's next budget is likely to contain both small spending increases and an overall deficit.Finance Minister Iris Evans said that Alberta will be having a deficit next year and spending will continue to rise, although not as quickly as it did when high energy revenues filled the government treasure chest. Moreover, she also warned Albertans last week that the province will rack up a $1-billion deficit this year as well - down from budget projections of a $1.6-billion surplus. In fact, this year's red ink will total $1.4 billion, according to the third-quarter update. It's the first deficit in 15 years and may grow when the province's health authorities deliver their books. Many expect the health authorities to be hundreds of millions of dollars in debt. However, the Conservative government is not replacing the fund's losses, so it will still have enough cash to follow through on a $2-billion promise to fight climate change. Lastly, Evans acknowledged Alberta's energy-based economy is tumbling into a recession after leading the country for years. She projected the province will lose 15,000 jobs in the months ahead.

Connections

Chapter 4 talks about the growth of government spending and it also mentioned that the major alternative to taxation as a source of government revenue is borrowing. The article mentioned that there will be a deifct next year, and many assume Alberta will also be in debt which will led to thousands of unemployments. These are many factors involved in increased government spending, also including the transition from a rural to urban country and the government becoming more involved in the education system and to the public. These are true for Alberta, considering there is the $22.2-billion construction program for roads and schools. Two-fifths of the entire spending in Canada is controlled by the government. So the Canadian Government has to come up with a way to slove this issue which is to either borrow money from other countries or get money through taxations.

Reflection

I believe that even though Alberta is in debt and had increased its spending. It isn't the only provinces that is in this situation. Other provinces and territories are in the same position too, such as BC. Since Vancouver is hosting the 2010 Winter Olympics, there have been millions of dollars going into that project and yet the whole country is going into recession. It will only make matter worse. So I think all the provinces should work together as a whole and figure out a solution to slove this problem and clear the debts together as a country.

Economics 12 Chapter Three

Bush government paid too much for bank stocks

Link: http://www.cbc.ca/money/story/2009/02/06/bailoutoverpay.html

Summary

This article talks about how Bush administration paid tens of billions of dollars too much for stocks and other assets in its massive bailout last year of Wall Street banks and financial institutions. Moreover, it added to the frustrations of legislators already due to the $700-billion rescue plan, known as the Troubled Asset Relief Program, or TARP. congress members approved the plan last year,but many members from both parties critized this spending decision made by President Bush and former treasury secretary Henry Paulson.The oversight panel examined 10 transactions, including to ones designed to put liquidity into the banks in hopes of easing credit. However, that money went to banks considered financially healthy but in need of capital to make loans. Two other transactions went to AIG and to Citigroup Inc. under programs designed to help companies facing serious financial difficulties. Overall, the analysts conduct the valuation study found that the Treasury used taxpayers' money to pay $62.5 billion more than the value of assets in the 10 transactions it examined. By extrapolating hundreds of institutions it is concluded that the government in effect paid $78 billion more than the value of the assets at the time.

Connections

Chapter 3 talks about the role of government in a market economy and this article could be related to the chapter very well. It talks about how Bush and the goverment are spending billions of dollars too much on stock and other company that's collapsing to help the massive bail out last year. Moreover, many believes that it is the lack of a role of the government in the American banking system that has triggered the recent global economic crisis. In the taxtbooks it also mentioned about how only after conditions did not improve during the Great Depression, did governments realize they cannot wait for the market itself to readjust and must galvanize the economy with bold fiscal policies themselves. If the government realized earlier and started different act and summit in advance, it would offer more jobs which would decrease unemployment rates. If people have a job they will eventually start spending money which will slowly increase economic growth. Another solution the textbook mentioned was how the government can intervene to help stabilize the free-market system.

Reflection

I believe that if the government took a role in the economy earlier, it would help much more than just putting out billions of dollars trying to save when's been done already. The United States is going into a deeper recession and that will definitely affect other countries as well. If governement is different country could work together and imporve different system such as trade and gobalization. It might help the world's economy as a whole. Lastly, the govenerment should have used some of the money from the billions to help the public and increase unemployment rate, because it is the most direct ways to help citizens.

Accounting 12 Chapter 12

Gas prices drop record amount

Link: http://www.cnn.com/2008/US/10/26/gas.prices/index.html?iref=newssearch

Summary

The average price of self-serve, unleaded gas in the United States as of Friday was $2.78 a gallon, compared to $3.31 two weeks ago. A total of 53 cents drop in gas prices over the last two weeks has set another record, and the publisher of a national survey predicted that Sunday prices will continue to decline, but at a slower pace. The all-time high average was $4.11. Numbers based on responses from more than 5,000 service stations nationwide. Oil prices have fallen by more than half from $147 a barrel in July because of lower demand due to rough economic times, especially in the United States.

Connections

The connections I made between the article and chapter 12 would be cash discounts. The article talks about the massive drop in oil prices. With this chapter focusing on specialized journals, discounts are recorded in the Discounts Earned account (for the customer) and/or the Discounts Allowed account (for the retailer). While this focuses mainly on retailers businesses but I think prices drop has does the same effect as discount. They both attract consumer and increase the demand of such products. Moreover, there are discounts given when payments are made before its due date. These discount have terms that must be met before it is in effect.

Reflection

In my opinion, I think having discounts or lowering the price to attract consumer are great strategies, since not only consumer can get a great deal but at the same time retailer can make a profit and increase its demand of the product. Moreover, I think having discount encourage people to shop more and it could increase our country’s economy. Therefore I think lowering prices and having discounts are consider a win-win situation.