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.