As you've read in your text, the overall percentage of U.S. citizens participating in a stock market either through individual holdings or through financial intermediaries such as mutual funds has declined since the 2008 recession. Prior to 2008, a greater percentage of Americans held stock market investments than do in 2018. This is an interesting characteristic, given the following factors:

1. Investing in the market through savings plans, 401k or 403b accounts, individual IRAs, or similar retirement plans has never been easier given the amount of information available to any individual. Individuals can invest small amounts such as $20 and benefit from dollar-cost averaging through automatic deposits and electronic transactions such as payroll deductions.
2. While a vast majority of Americans will be dependent on Social Security as their primary source for retirement income, the message that relying solely on SS for retirement continues to be broadcast by media outlets such as the AARP.
3. Since 2008, the markets have rebounded significantly from their 2008 lows.
4. Basic principles of investing are easily located on the internet, from a variety of sources. For example, see the "Index Card" resource posted in Week 5, which is a short list of fundamental investing principles.

For this discussion post, you are to state a position and present an argument related to the above state of investing by U.S. citizens today. Why has the overall percentage of Americans invested in the market decreased in the last decade? And, subsequently, what can be done about this?    In your argument, which is to be supported by both textbook and outside research, delve into one or more of the primary concepts presented in this week's readings. These include the various stock market indexes, international markets, the role of the mutual fund industry, active versus passive investing, in addition to multiple other concepts.

Investing

As you've read in your text, the overall percentage of U.S. citizens participating in a stock market either through individual holdings or through financial intermediaries such as mutual funds has declined since the 2008 recession. Prior to 2008, a greater percentage of Americans held stock market investments than do in 2018. This is an interesting characteristic, given the following factors:

1. Investing in the market through savings plans, 401k or 403b accounts, individual IRAs, or similar retirement plans has never been easier given the amount of information available to any individual. Individuals can invest small amounts such as $20 and benefit from dollar-cost averaging through automatic deposits and electronic transactions such as payroll deductions.
2. While a vast majority of Americans will be dependent on Social Security as their primary source for retirement income, the message that relying solely on SS for retirement continues to be broadcast by media outlets such as the AARP.
3. Since 2008, the markets have rebounded significantly from their 2008 lows.
4. Basic principles of investing are easily located on the internet, from a variety of sources. For example, see the "Index Card" resource posted in Week 5, which is a short list of fundamental investing principles.

For this discussion post, you are to state a position and present an argument related to the above state of investing by U.S. citizens today. Why has the overall percentage of Americans invested in the market decreased in the last decade? And, subsequently, what can be done about this? In your argument, which is to be supported by both textbook and outside research, delve into one or more of the primary concepts presented in this week's readings. These include the various stock market indexes, international markets, the role of the mutual fund industry, active versus passive investing, in addition to multiple other concepts.  

Barnes Company reports the following operating results for the month of August: sales $300,000 (units 5,000); variable costs $223,000; and fixed costs $70,800. Management is considering the following independent courses of action to increase net income.

Compute the net income to be earned under each alternative.

1. Increase selling price by 10% with no change in total variable costs or sales volume.

2. Reduce variable costs to 56% of sales.

3. Reduce fixed costs by $18,000.

Which course of action will produce the highest net income?

Alternative 1 // Alternative 2 // Alternative 3

Morty Enterprises, is a new start-up company. Morty Enterprises has been preparing to begin operations for the past six months and is almost ready to start production. It has incurred significant costs but no revenue has yet to be earned. Organization costs such as legal fees and advertising have been capitalized as start-up costs. Morty Enterprises has expensed all payroll expenses, rent, and other similar costs as incurred—this has resulted in a significant loss being reported on the first year’s financial statements. Is Morty’s accounting treatment in accordance with GAAP?

This is an essay question, please answer it as detailed as possible. Thank you!

The initial equity capital of Toys 4 Tots, Inc. (T4T) consisted of 10 million Shares sold at $ 0.25 Par Value Per Share. The company has been in business for a year and has earned Net Income of $ 500,000, paid $ 100,000 in Dividends, and retained the balance. T4t issued 1 million Shares of Stock last week at $ 0.60 Per Share. Based upon this please compute the following ending balances for T4T.

a. Total Par Value

b. Total Additional Paid In Capital

c. Total Common Stockholders Equity

d. Total Book Value Per Share

e. Price/Earnings Ratio

How a Welsh jeans firm became a cult global brand

With a look of concentration on her face, a worker guides the sheet of denim through the sewing machine, and a pair of jeans starts to take shape.

As the needle goes up and down in a blur of movement and rattling noise, a line of stitching starts to form a neat trouser leg.

When most people think about the global fashion industry it is safe to say that a sleepy town in far west Wales does not immediately spring to mind.

Yet Cardigan, on Wales' Irish Sea coast, has for the past five years been home to a high-end jeans-maker - the Hiut Denim Company.

Beloved by a growing number of fashionistas from New York to Paris, and London to Melbourne, Hiut ships its expensive jeans around the world.

As orders arrive via its website, Hiut's workforce of just 15 people gets to work hand-cutting and sewing the trousers from giant rolls of indigo-coloured denim that the company imports from Turkey and Japan.

Despite only making around 120 pairs of jeans a week, founder and owner David Hieatt has big ambitions to expand.

While it may seem a little incongruous that a posh jeans business is based in west Wales, Cardigan (population 4,000) actually has a long history of jeans-making.

For almost 40 years the town was home to a factory that made 35,000 pairs of jeans each week for UK retailer Marks & Spencer. But in 2002 the facility closed with the loss of 400 jobs when production was moved to Morocco to cut costs.

Fast forward 10 years, and when Mr Hieatt - a proud Welshman - was looking to open a factory to start making jeans, he chose Cardigan. The company name is a combination of the first two letters of Mr Hieatt's surname and the word "utility".

"Where better to locate ourselves than in a town with a history of jeans-making, where the expertise remains?" he says.

Employing machinists who had previously worked in the old factory and not lost their years of jeans-making skills, Mr Hieatt says he was confident that Hiut could be successful if it concentrated on selling directly to consumers around the world via its website.

"Without the internet we'd have been dead within 12 weeks," he says. "But the internet has changed only everything. The internet allows us to sell direct and keep the [profit] margin... it enables us to compete."

Now exporting 25% of its jeans, it takes Hiut about one hour and 10 minutes to make one pair, compared with 11 minutes at a highly mechanised jeans industry giant.

And rather than staff doing just one part of the manufacturing process, such as sewing on the pockets, each machinist at Hiut makes a pair of jeans from start to finish.

Mr Hieatt refers to the workers as "grand masters". This is in reference to the fact that some of them have more than 40 years of jeans-making experience, and new joiners have to train for three years before they can start making jeans for customers.

In running Hiut Mr Hieatt and his co-owner, wife Clare, have benefited from their experience of previously owning a clothing firm called Howies, which they sold to US firm Timberland for £3.2m in 2011.

But what has also been invaluable is Mr Hieatt's previous career working in advertising.

This advertising nous has enabled him to very effectively market and promote Hiut, from its snazzy website, to its extensive use of social media; both adverts in people's Facebook feeds and arty photos of people wearing its jeans.

"The interesting thing about social media for me is that up until Facebook, Instagram, Twitter and SnapChat you had to have a huge budget in order to tell your story," he says.

"In effect you were locked out of telling that story because the costs [of advertising and wider marketing] were too high. But social media has actually allowed the smaller maker [small firms that manufacture things] to go and tell his story.

"And actually, if David wants to beat Goliath, the best tool in the world is social media."

Mr Hieatt also sends out free jeans to what he calls "influencers", either fashion bloggers or famous people, in the hope that they will write or talk positively about the brand.

Successful examples of this have been an increase in orders from Denmark after Hiut sent a pair of its jeans to celebrated Danish chef Rene Redzepi, and also UK TV presenter Anthony McPartlin of the duo Ant & Dec tweeting about the company.

As Hiut continues to win overseas orders for its jeans costing up to £230 ($300) a pair, Mr Hieatt admits that one negative issue the company has to deal with is a return rate of "about 14%" - people sending them back because they don't fit.

To counter this problem Hiut is exploring using technology that can accurately tell from a photo a person's perfect jeans size.

Dr Natascha Radclyffe-Thomas, fashion marketing course leader at London College of Fashion, says that if Hiut wants to expand its overseas sales it needs to "have the website in different languages" and consider partnerships that will see its jeans listed on other websites.

Back at Hiut's small factory on the edge of Cardigan, Mr Hieatt says the long-term aim remains to recreate 400 jeans-making jobs in the town.

"Our aim is to get 400 people their jobs back. If you ask me when is that going to happen, the honest answer is I don't know.

"But I believe in compound interest. Small things over time gather huge numbers."

QUESTION:

What international marketing strategy would you recommend to the firm?

Introducing Students to the FASB Codification System 163 The Accounting Educators’ Journal, 2011 Case 3 Sublease You are an audit partner in Slick & Co. CPAs. Mann Co. has been an audit client for ten years. Mann Company is owned by Lisa Mann who is a very astute businesswoman but she is not at all knowledgeable about GAAP. In fact over the years she has complained about the “stupid GAAP rules”. Lisa has built Mann into a $100 million in sales company that went public several years ago. You ran into her waiting in line at a restaurant and she indicated that she had a problem you need to address for her. She said: “ I know you remember all of the equipment we leased about three years ago. Remember, we had disagreements on how the lease should be handled. You made us treat it as a purchase and record a related liability of about $5 million, as I recall. The lease was an eight-year lease and we have been depreciating the asset over the lease term. As you know, our business has been expanding rapidly and the leased equipment is no longer adequate for our needs. We have decided to buy or lease new high output equipment. The lease on the original equipment allows us to sub-lease the equipment, which is our plan since the lease has another four to five years to go. My question to you is, if we sublease the equipment can we take it and the related liability off our books? We really need to get that debt off our books. Perhaps you could tell me how we should structure the deal so that we can get the liability off the books.” At this point Lisa was told that her table was ready so she needed to rejoin her party. She said “Would you please write a letter giving your advice and please give me specific references to GAAP so that my controller can review the materials with me. Thanks so much for your help on this. I really need to join my friends….. Try the Veal Marsala…it is great here!” Write a memo to Lisa Mann providing the information she requested.

Suppose Congress (in an attempt to stimulate the economy in both the short and long run) passes an investment-tax credit designed to increase domestic investment.

How will this policy affect (comparing the state of the economy prior to the enactment of the Investment Tax Credit): [Explain how you worked out your answers in each case.]

1) national saving?

2) domestic investment?

3) net capital outflow?

4) the real interest rate?

5) the exchange rate?

6) the trade balance?

Hints:

1) An investment-tax credit provides businesses with a "credit" on their federal income-tax obligation that is proportional to the dollars spent on qualifying capital goods purchases during a given tax year. A 10% tax credit might work as follows. Consider the purchase of a new computer system for your company which costs $100,000. This investment would translate into a $10,000 credit (reduction) in taxes owed by the company at the end of the year. Thus a policy enacting an investment tax credit is expected to increase the demand for investment goods at every interest rate. You should think about what happens to the demand for loanable funds if there is an increase in the domestic demand for investment goods at every real interest rate.

2) Using the 3-graph model developed in chapter 14 (see Figures 3 through 7 on pages 301 - 309), consider first the impact on the demand for loanable funds. If businesses respond as expected to the investment-tax credit, consider what will happen to the demand for loanable funds. Given this, consider what, if any, change there will be in interest rates. If interest rates change, then consider what the expected impact will be on net capital outflow (net foreign investment). [Pay close attention to Figure 3 (page 301). A rise in the real interest rate causes net capital outflow (aka net foreign investment) to move in a negative direction. Think about this in the following way. As real interest rates in the US rise (relative to real rates in the rest of the world) the foreign demand for US assets rises. At the same time the US demand for foreign assets will fall because of the higher return available in the US. Both effects cause net foreign investment to move in a negative direction.]

Mr. Bestall, CFO of the Best Finance Inc., was satisfied with its income statement report. He decided to have a meeting with the analysts following the Best Finance Inc. before filing its financial statements with the SEC. The following conversation was in the meeting. CFO: The year ended on September 30 should be our most profitable in history and as a consequence, the board of directors has just awarded the officers generous bonuses. Analysts: I thought profits were down this year in the industry, mainly because of the pandemic COVID 19. Your latest interim report showed losses too. CFO: Well, they were down, but ten days before closing the accounting period we closed a deal that will give us a substantial increase for the year. Analysts: Oh, what was it? CFO: Well, you remember a few years ago our former president bought stock in Jubilee Enterprises because he had an inorganic growth plan. For six years, we have not been able to sell this stock, which cost us $3,000,000 and has not paid any dividends at all. We sold this stock to Rich & Rich Inc. for $4,000,000. So we had a gain of $700,000 ($1,000,000 before tax) which increased our net income for the year to $4,000,000. Last year's net income was $3,700,000. As far as I know, we will be the only company in the industry to register an increase in net income this year. That should help the market value of the stock! Analysts: When do you expect to receive the $4,000,000 in cash? CFO: They give us a $4,000,000 zero-interest bearing note with payments of $400,000 per year for the next ten years. The first payment is due on September 30 next year. Rich & Rich Inc. is an excellent company. They are a little tight for cash because of their rapid growth. Analysts: Why is the note zero-interest bearing? CFO: Because that's what everybody agreed to. Since we don't have any interest-bearing debt, the funds invested in the note do not cost us anything and besides, we were not getting any dividends on the Jubilee Enterprises stock.

Do you agree with the way the CFO has accounted for the transaction?

Explain your reasoning.