In: Economics
International Financial Reporting Standards are gaining support around the globe. In 2007, the SEC eliminated the requirement for foreign companies that issue stock in the United States to include in their financial statements a reconciliation of IFRS to U.S. GAAP. There also is a serious discussion of allowing U.S. companies to choose whether to prepare their financial statements according to U.S. GAAP or IFRS.
Many outside of the United States claim that a problem with U.S. GAAP is that there are too many rules. They argue for principles-based accounting standards in which the broad principles of accounting are emphasized and less emphasis is placed on detailed implementation rules. Americans counter that IFRS may lack quality and rigor. Additional rules are necessary to provide adequate guidance to users.
Requirements:
@Describe the two major reporting standards in the world.
@Research and name which countries use GAAP vs. IFRS.
@Explain the difference between principles and rules-based accounting standards.
@Explain the advantages of each approach.
In: Accounting
The economic and financial crisis of 2008-2009 represents the most serious economic downturn in the U.S. and the world since 1929. Review and discuss the Federal Reserve and its role in our economy during this time including a discussion of our nation's three main economic goals. Describe the historic monetary and fiscal policy efforts undertaken by the U.S. Government and Federal Reserve including both the traditional and non-traditional measures to ease credit markets and stimulate the economy. Finally, relate the Fed and U.S. Government involvement to our present volatile environment and indicate what measures, if any, each should pursue in the next 12-24 months, given the status of our three main economic goals. Include a discussion on return from historically low interest rates, the Fed balance sheet, historically high federal / U.S. debt levels, and potential new fiscal policy and monetary policy initiatives.
In: Economics
North Bank has been borrowing in the U.S. markets and lending
abroad, thereby incurring foreign exchange risk. In a recent
transaction, it issued a one-year $2 million CD at 6 percent and is
planning to fund a loan in British pounds at 8 percent for a 2
percent expected spread. The spot rate of U.S. dollars for British
pounds is $1.32/£1.
a. However, new information now indicates that the
British pound will appreciate such that the spot rate of U.S.
dollars for British pounds is $1.30/£1 by year-end. Calculate the
loan rate to maintain the 2 percent spread.
b. The bank has an opportunity to hedge using
one-year forward contracts at 1.33 U.S. dollars for British pounds.
Calculate the net interest margin if the bank hedges its forward
foreign exchange exposure.
c. Calculate the loan rate to maintain the 2
percent spread if the bank intends to hedge its exposure using the
forward rates.
In: Finance
North Bank has been borrowing in the U.S. markets and lending abroad, thereby incurring foreign exchange risk. In a recent transaction, it issued a one-year $1.50 million CD at 4 percent and is planning to fund a loan in British pounds at 6 percent for a 2 percent expected spread. The spot rate of U.S. dollars for British pounds is $1.450/£1. a. However, new information now indicates that the British pound will appreciate such that the spot rate of U.S. dollars for British pounds is $1.43/£1 by year-end. Calculate the loan rate to maintain the 2 percent spread. b. The bank has an opportunity to hedge using one-year forward contracts at 1.46 U.S. dollars for British pounds. Calculate the net interest margin if the bank hedges its forward foreign exchange exposure. c. Calculate the loan rate to maintain the 2 percent spread if the bank intends to hedge its exposure using the forward rates.
In: Finance
•U.S. produced John Deere tractor, price $25,000 in t-1 and t-2.
•Italian produced designer shoes, price €350 in t-1 and t-2.
•Dollars per Euro:
•If in t-1 $1.0741: €1 then $1 = € 1/1.0741 In t1, $1 = € 0.931012
•t-2 $1.1385: €1 In t2, $1 = € 0.8783487
1.What is the Euro price of the tractor in t-1?
In t-2?
1.What is the U.S. dollar price of the Italian shoes in t-1?
In t-2?
1.Draw a demand curve for U.S. tractors illustrating the effect of the change in exchange rates. Only draw the demand curve.
2.Draw a demand curve for Italian shoes illustrating the effect of the change in exchange rates. Only draw the demand curve.
3.All else remaining equal, what will happen to Italian GDP?* Why?
4.All else remaining equal, what will happen to U.S. GDP?* Why?
In: Economics
Contingency tables may be used to present data representing scales of measurement higher than the nominal scale. For example, a random sample of size 20 was selected from the graduate students who are U.S. citizens, and their grade point averages were recorded. 3.42 3.54 3.21 3.63 3.22 3.8 3.7 3.2 3.75 3.31 3.86 4 2.86 2.92 3.59 2.91 3.77 2.7 3.06 3.3 Also, a random sample of 20 students was selected from the non-U.S. citizen group of graduate students at the same university. Their grade point averages were as follows. 3.50 4.00 3.43 3.85 3.84 3.21 3.58 3.94 3.48 3.76 3.87 2.93 4.00 3.37 3.72 4.00 3.06 3.92 3.72 3.91 Test the null hypothesis that the proportion of graduate students with averages of 3.50 or higher is the same for both the U.S. citizens and the non-U.S. citizens
In: Math
Unauthorized Immigrant Workers at Chipotle Mexican Grill Restaurants
In 2015, Chipotle Mexican Grill acknowledged that it was still under investigation by the Securities and Exchange Commission and the U.S. attorney for the District of Columbia for possible failure to comply with laws on employee work eligibility. “It is not possible to know at this time,” the company stated in its annual report to shareholders, “whether the company will incur, or to reasonably estimate the amount of, any fines, penalties or further liabilities in connection with these matters.”
Chipotle’s troubles with immigration had begun four years earlier, when federal agents had descended on dozens of Chipotle Mexican Grill restaurants around the country, from Los Angeles to Atlanta, interviewing employees and managers. Their purpose was to determine whether—and to what extent—the fast-food chain was hiring unauthorized immigrant workers in violation of U.S. law.
Chipotle was a fast-growing chain of restaurants specializing in burritos, tacos, and salads made on premises from fresh ingredients. Founded in Colorado in 1993 by chef Steve Ells, at the time of the immigration raids the company owned more than 1,200 restaurants in 41 states, Ontario, London, and Paris. Chipotle employed 31,000 people, 92 percent of whom were hourly employees. Operating under the slogan “Food with Integrity,” the chain reported $2.27 billion in revenue and 11 percent sales growth in 2011, despite the struggling economy. Some analysts believed that one of the reasons for Chipotle’s strong performance was, as the news service Reuters put it, its “uncanny ability to hold down labor costs.”
Page 369Under government rules, foreign-born individuals are permitted to work legally in the United States under some conditions. They can obtain a green card, a work permit issued to permanent residents (most of whom are close relatives of U.S. citizens). Highly skilled workers in short supply can apply for an H-1 visa. Low-skilled workers can apply for an H-2 visa for temporary, seasonal work; however, these are available to only about 1 percent of the unauthorized population. When hiring, employers are required to fill out and keep on file an I-9 form, documenting a person’s eligibility to work, and present it to government investigators if asked.
About half a million undocumented immigrants entered the United States every year during the past decade, two-thirds by crossing the Mexican–U.S. border and the rest by overstaying temporary visas. The Pew Research Center estimates there are 8.1 undocumented immigrants in the U.S. workforce, about 5 percent of the total. Three-quarters of them are Hispanic, mostly from Mexico but also from Central and South America. The main reason they immigrate is for economic opportunity; studies show, for example, that a Mexican man with a high school education can make two and a half times as much in the United States as in his home country, even after taking into account differences in the cost of living.
Most take low-skilled jobs in a small number of occupations and industries. Fully a quarter of farmworkers in the United States—and about a fifth of building and grounds maintenance workers—are undocumented immigrants. In the restaurant industry, they make up 12 percent of food-preparation workers and servers nationally—and much more in some regions, such as southern California. A study by the Food Chain Workers’ Alliance found that undocumented workers earned a median hourly wage of $7.60 (compared with about $10 for other workers in the food industry) and were more than twice as likely to experience some kind of wage theft, such as unpaid hours. Forty-four percent of undocumented workers in the food industry were actually earning less than minimum wage.
Over the past decade, government policy toward people working in the United States illegally has undergone a sharp about-face. Under President George W. Bush, Immigration and Customs Enforcement (ICE), a division of the Department of Homeland Security, conducted a series of high-profile raids of factories, targeting foreign workers who were unable to produce authentic work papers. For example, in 2008, ICE agents arrested and deported hundreds of workers at a meatpacking plant in Iowa.
The Obama administration took a different approach, focusing its enforcement efforts on employers. ICE began conducting I-9 audits, checking businesses to make sure their employees’ papers were in order. The Social Security Administration also began investigating situations where Social Security numbers provided by employees did not match their records (in the case of illegal workers, these numbers were often fictitious). If the agents found evidence of problems, they ordered that employers comply with the law—and in some cases imposed fines or even brought criminal charges against managers.
Chipotle was not the only employer targeted by these investigations. For example, American Apparel, a garment company based in Los Angeles, terminated 1,800 undocumented workers after an ICE audit found widespread irregularities. At L.E. Cooke Company, a family-owned nursery in California’s Central Valley, the owner was forced to fire 26 of his 99 employees who had entered the country illegally. Many had worked for the nursery for many years and had specialized skills. “Telling them was probably the worst day of my life,” the owner said. “I don’t just sit at a desk here, I’m actually out in the fields harvesting with them.”
Page 370As it awaited resolution of the government investigations, Chipotle’s management took steps to tighten up its employment procedures. In addition to terminating workers it found to be undocumented, Chipotle ordered all its restaurants to use the federal E-Verify system, even in states where this was not required. (E-Verify is an online system that compares information from a new employee’s Form I-9 to social security and homeland security data to confirm work eligibility.) It also adopted an electronic Form I-9 to reduce errors. But the company’s CEO acknowledged that its systems were not foolproof. “Whatever systems you have for anything really, there are always going to be people who try to game the system,” he said. “But I think that we are going above and beyond . . . to ensure that we are complying with the immigration [laws].”
Questions
1.Do you consider being an unauthorized immigrant a form of workplace diversity? How is it similar to and different from other kinds of workplace diversity discussed in this chapter?
2. Do you agree with Chipotle’s response to the government’s enforcement effort? What else should Chipotle’s managers do now, and why?
In: Operations Management
On September 1, 2019, the entity bought the bonds belonging to the private sector with a nominal value (par value) of $400,000 with an annual interest payment of 12% through the bank. The related bonds were sold on February 1, 2020 with a bank equivalent of $424,000 .
a- Please show the journal entries required on 31 December 2019.
b- Show the journal entries required on February 1, 2020.
c- If these bonds were sold on February 1, 2020 for $418.000 show the journal entries.
In: Accounting
| On March 2, 2020 Senators shipped merchandise costing $108,000 to Canadiens. Senators paid | ||||
| $900 for freight and Canadiens paid $1,000 for advertising (to be reimbursed by Senators). | ||||
| By the end of the third quarter of 2020 (September 30, 2020), Canadiens advised Senators that | ||||
| all merchandise has been sold for $165,500 and forwarded the proceeds (net of a 9% commission | ||||
| and the outlay of advertising) to Senators. | ||||
| 1. Prepare all entries for Senators to account for this transaction. | ||||
| 2. Prepare all entries for Canadiens to account for this transaction. | ||||
In: Accounting