Week 10 EOC: My Plans

Now that I have finished this accounting class I have developed an understanding for the importance of book keeping and accounting. This class couldn’t have come at a more perfect time for me because I have been trying to re brand myself and really zone in on what I want to contribute to the fashion industry. My website and company Haus of Unicorn got a great response during its first year in the market, we gained a following of over 1500 people in 12 different countries and gained wardrobe styling clients. Now that I have successfully completed this accounting class the direction I want to go in with my re branding is writing as a chronic fashion editor, designing chronic fashion, sell garments, wardrobe styling, and YouTube. Accounting has made me realize the importance of spending my money correctly to gain profit and grow the business. With my re branding I am focusing on marketing because that’s what I am studying in school, I believe in my skills, the message I am delivering and the impact I will have on the industry. I will be creating and defining the fashion style in the marijuana business which will impact the mass market of the fashion industry. My first step in my re branding is redesigning my logo, deleting and adding new chronic fashion content, set a date to relaunch Haus of Unicorn, and stay focus on my goal. 

EOC Week 9: Acquire the restaurant?

1. These five important fixed costs will affect Dan's purchase decisions will be 
-Insurance 
-Property Tax
-Rent / Mortgage 
-Employee Salaries
-Utilities 

2. Loralei's important variable costs that would be directly affect the operating decisions would be. 
-Direct Materials
-Commissions
-Production Supplies 
-Credit Card Fees 
-Food Cost 

3. In my opinion I think if Dan and Loralei purchase the restaurant Loralei variable cost will be most important to focus on. If they work on lowering the variable cost they will make more profit from each table or customer. As their sales volume increases the cost of the sale will increase as well, "In the restaurant business, each steak you sell requires that you purchase a steak to replace it. The more steaks you sell, the higher your own steak cost will become because your steak cost will increase when your steak sales increase and decrease when your steak sales decrease" (Dopson, Lea R. Managerial Accounting for the Hospitality Industry. Wiley, 09/2008. [The Art Institutes]). Since the fixed cost will always be constant within the month to month business operations it's best to get your variable cost on a steady pace just like the fixed cost. "A fixed cost is one that remains constant despite increases or decreases in sales volume. Other typical examples of fixed costs include payments for insurance policies, property taxes, and management salaries" (Dopson, Lea R. Managerial Accounting for the Hospitality Industry. Wiley, 09/2008. [The Art Institutes]). The Restaurant that Dan and Loralei are acquiring about is at down$1,302,000 in revenue difference from last year at $1,400,000 and this year $98,000. "In some cases, the amount hospitality managers must pay for an expense will not be fixed but will vary based on the success of their business. Good managers seek to decrease their fixed costs to their lowest practical levels while still satisfying the needs of the business and its customers. Those same good managers, however, know that increases in variable costs are usually very good!" (Dopson, Lea R. Managerial Accounting for the Hospitality Industry. Wiley, 09/2008. [The Art Institutes]). Its clear from this information that the problem is the amount of customers coming into the restaurant and generating revenue for the business.

Week 8 EOC: Chapter 8 Quiz, Question 4

a. What were the total revenues in October 2009 and October 2010?

b. What was the GOP in dollars in October 2009 and October 2010?

c. What was the percentage of GOP to total revenues in October 2009 and October 2010?

d. What was the flow-through percentage achieved by Santi’s hotel? What is your assessment of that percentage?

Answers:

 

a.    The total revenues in October 2009 was 545,000 and October 2010 was 583,000. 

b.  The GOP in October 2009 was $162,000 and in October 2010 was 184,550

c.    The GOP in total revenues % in October 2009 was 29.72 and in 2010 was 31.66%

d.  The flow-through % was 59.34%. In my opinion that percentage, is slightly high which is great for the business. "Flow-through is a measure of the ability of a hotel to convert increased revenue dollars to increased gross operating profit dollars" (Dopson, Lea R. Managerial Accounting for the Hospitality Industry. Wiley, 09/2008. [The Art Institutes]). This number shows the movement of products and how well the business can generate revenue for the business. "Gross operating profit (GOP) is, in effect, total hotel revenue less those expenses that are considered directly controllable by management. Flow-through was created by managerial accountants to measure the ability of a hotel to convert increases in revenue directly to increases in GOP" (Dopson, Lea R. Managerial Accounting for the Hospitality Industry. Wiley, 09/2008. [The Art Institutes]). With the flow-through percentage it its important to remember that these numbers help the mangers with the business, this number 59.34% shows, "flow-through is computed to help managers identify the impact of increases in revenue on profitability. When it is high (over 50%), it usually reflects efficiency on the part of management in converting additional revenues into additional profits" (Dopson, Lea R. Managerial Accounting for the Hospitality Industry. Wiley, 09/2008. [The Art Institutes]).

Week 7 EOC: Trump and Small Businesses

Depending on your type of business and how well you have been doing in the market will you feel a difference when trump assumes office next year . From what I have read and heard from Trump is that he is about economics, "For each 1 percent in added GDP growth, the economy adds 1.2 million jobs. Increasing growth by 1.5 percent would result in 18 million jobs (1.5 million times 1.2 million, multiplied by 10 years) above the projected current law job figures of 7 million, producing a total of 25 million new jobs for the American economy" (Trump, Donald J. "Economy." DonaldJTrump For President. N.p., n.d. Web. 21 Nov. 2016.) Even though he stands in a good position he has publicly stated a lot of horrible things that don't line up with the issues he's pro on . This economic tax break he's always talking about is not for the poor or middle class, it's for the rich and ultra rich. Trump speaks to the people that he understands and lives life alike, he only understands his people and has no interest of others. "More concretely, Trump bragged that the plan would deliver large benefits for middle-income taxpayers and that, "by contrast, someone earning $5 million will receive virtually no change in their tax bill at all." (Https://www.facebook.com/jimtank. "Donald Trump’s Tax Plan Now Favors the Ultra-rich Even More." Washington Post. N.p., 19 Sept. 1970. Web. 21 Nov. 2016.) From a personal stand point I consider myself below middle class but not poor, I have aspirations to make money from my fashion skills and knowledge. When Obama was president I felt like I could do anything because the president has my best interest, but now that trump is in office I feel as if I have to watch my back extra close because I'm not sure what my president will do to my future. “Laziness is a trait in blacks.” “Black guys counting my money! I hate it. The only kind of people I want counting my money are short guys that wear yarmulkes every day.” (Blay, Zeba. "12 Reasons Donald Trump Would Not Be Great For 'The Blacks'" The Huffington Post. N.p., 11 Mar. 2016. Web.). I think love, peace and unity are the things we need our leader to instill in the people of this nation, we the blacks are giving trump a chance we just hope he does the same for us.  

Week 6 EOC: Pot in the Work Place

There are a lot of different stereotypes about people who smoke marijuana. When it comes to a working environment people that use marijuana are looked down upon and most times get denied for employment. For a person that partakes in using marijuana recreationally or medically and has all of the correct documentation to legally use the flower will still be denied employment because of a drug test, even if it is decriminalized in their state. "Twenty-three states and the District of Columbia have decriminalized medical marijuana. These laws vary greatly in their criteria and implementation. In addition, some states, including Arizona, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada and New York, require accommodations for registered medical marijuana users. In those states, an employer cannot take an adverse action against an employee simply because of his or her participation in a recognized medical marijuana program" (Marijuana in the Workplace: A Hazy Issue for Employers. SHRM. N.p., 18 Sept. 2015. Web. 14 Nov. 2016). From my perspective I think I break all stereotypes of marijuana users in the workplace because of the way I look and I can pass a drug test. As a user you have to understand that the workplace does not care about your habit because you still have a take and pass a drug test. I myself understand this which is why I can stop smoking for however long and cleanse my body so I can pass a drug test because I do want the job. Other people don't care as much and fight for their rights as a medical marijuana patient.  

"For instance, if an employee tests positive for marijuana, the employer should ask the worker to verify that he or she is a participant in a recognized medical marijuana program. Then the employer conducts a further evaluation of the employment situation"(Marijuana in the Workplace: A Hazy Issue for Employers. SHRM. N.p., 18 Sept. 2015. Web. 14 Nov. 2016). Of course I am not saying you should under the influence of marijuana at work or even use it if you operate heavy machinery, but employers should look at the functions of the job and make sure the employee has the correct documentation to use when they are off the clock.  "It goes without saying that working under the influence of marijuana—or any intoxicant for that matter—is to be discouraged. But marijuana is known to stay in one’s system after its psychoactive effects wear off. Therefore, whether employers are able to penalize employees for engaging in state-sanctioned marijuana use, despite no indication of impaired work performance, is a difficult question to answer.  As with most marijuana-related issues, this is a state-by-state determination" (High Stakes: Marijuana in the Workplace - California Lawyer. California Lawyer. N.p., 28 July 2016. Web. 14 Nov. 2016). 

Week 4 EOC: Chapter 5 Quiz Question 2

a. Did the change in Cash reflect a Source or a Use of funds? What was the amount of that change?

b. Did the change in Net Receivables reflect a Source or a Use of funds? What was the amount of that change?

c. Did the change in Notes Payable reflect a Source or a Use of funds? What was the amount of that change?

d. Did the change in Retained Earnings reflect a Source or a Use of funds? What was the amount of that change?

e. What was the total amount of Sources and Uses of Funds?

Answers: 

a.  The Change in Cash reflected an increase of 14000 and was a Use.

Sources and Uses- inflows and outflows of money affecting the cash position.

b.  the change in Net Receivables reflected an increase of 30,000 and is a Use.

Net Receivables- Something that has been subtracted out. Are those monies owned to the business after subtracting any amounts that may not be collectible.

c.  The change in Notes Payable reflected a decrease of 44,000 and was a use. 

Notes Payable- Is classified as a current liabilities, are defined as those obligations of the business that will be repaid within a year.

d.  The change in Retained Earnings reflect a increase of 104,000 and was a source.

Retained Earnings- The accumulated amount of profits over the life of the business that have not been distributed as dividends.

e.    The total amount of Sources and Uses of funds was 743,000

Week 4 EOC: Chapter 5 Quiz Question 2

Week 4 EOC: Chapter 4 Quiz Question 3

a. Compare Rachel’s Cash % with the chain’s %.  Is it higher or lower?  What might this mean?

b. Compare Rachel’s Inventories % with the chain’s %.  Is it higher or lower?  What might this mean?

c. Compare Rachel’s Accounts Payable % with the chain’s %.  Is it higher or lower?  What might this mean?

d. Compare Rachel’s Notes Payable % with the chain’s %.  Is it higher or lower?  What might this mean?

Answers:

a. When comparing Rachel's Cash % with the chain's %, Rachel was 12.2% higher than the chain's %. This means that Rachel's cash/debit card transactions were coming in at a higher volume than the chain. "The term cash refers to the cash held in cash banks (for example, those used by cashiers in a restaurant), money held in checking or savings accounts, electronic fund transfers from payment card companies (such as MasterCard, American Express, Visa, and the like), and certificates of deposit (CDs), which are financial instruments with a fixed term and interest rate" (Dopson, Lea R. Managerial Accounting for the Hospitality Industry. Wiley, 09/2008. Ch 4, Pg. 122. VitalSource Bookshelf Online).

b. When comparing Rachel's Inventories % with the chain's %, Rachel was 10.1% higher than the chain's %. This means that Rachel's value of food and beverages was higher, as well as supplies for the business. 

c. When comparing Rachel's Accounts Payable % with the chain's %, Rachel was 33.7% higher than the chain's %. This means that Rachel has a high percentage of obligations of business that will be repaid within a year. Including (notes payable, income taxes payable, and accounts payable). "The most important sub-classifications of current liabilities include notes payable, income taxes payable, and accounts payable. In the hospitality industry, current liabilities typically consist of payables resulting from the purchase of food, beverages, products, services, and labor. Current period payments utilized for the reduction of long-term debt are also considered a current liability" (Dopson, Lea R. Managerial Accounting for the Hospitality Industry. Wiley, 09/2008. Ch 4, Pg. 127. VitalSource Bookshelf Online).

d. When comparing Rachel's Notes Payable % with the chain's %, Rachel was 8.8% higher than the chain's %. This means that Rachel had a high amount of promissory notes that had been issued by the company. "However, there are a variety of important reasons why they too must be able to read and analyze their own balance sheets to determine items such as the current financial balances of cash, accounts receivable, inventories, and accounts payable, and other accounts that have a direct impact on operations" (Dopson, Lea R. Managerial Accounting for the Hospitality Industry. Wiley, 09/2008. Ch 4, Pg. 117. VitalSource Bookshelf Online).

Week 3 EOC: Best Resaturant Experience

The best restaurant experience I have ever had is at Casa de Amour in Las Vegas, NV. They feature great Italian food with the essence of old school Vegas as the décor. You can find pictures on the wall of the Las Vegas strip during the mob times and speaking of the mob, Case de Amour was the preferred favorite for all of the high rollers and mobsters. "Assume that a hospitality business was created to sell products and services to customers. To do so, it bought raw ingredients; hired staff; purchased land, building, and equipment; created products or services and ultimately sold these to its customers or guests" (Dopson, Lea R. Managerial Accounting for the Hospitality Industry. Wiley, 09/2008. VitalSource Bookshelf Online.Ch2, pg. 33). What I think makes this my best restaurant experience is the live music and service. The live band has been performing at the restaurant for a number of years so their chemistry gives off a great vibe oh and not to mention they do take song request. They do covers of artist like Frank Sinatra and Tony Bennett which really gets you into the mood of this Italian restaurant. “Hospitality can be defined as the friendly and charitable reception and entertainment of guests or strangers” (Dopson, Lea R. Managerial Accounting for the Hospitality Industry. Wiley, 09/2008. VitalSource Bookshelf Online.Ch1, pg. 7). Since Casa de Amour has history, exquisitely prepared authentic Italian food, and a wine list that takes you around the world. In other words, this is not a cheap restaurant, average tab for two with one drink each is about $85-$100 which also comes with waiters that are knowledgeable about the establishment, product, and treat you like family (if you’re a repeat like me). My favorite waiter is the hospitality manager, “hospitality managers use the information you have already learned, new information (that you will learn) related specifically to the hospitality industry, and their own personal skills to analyze their businesses using managerial accounting techniques for the hospitality industry” (Dopson, Lea R. Managerial Accounting for the Hospitality Industry. Wiley, 09/2008. VitalSource Bookshelf Online. Ch1, pg.22). Because of his skills and the greatness of this restaurant it its truly a place that never lets me down.

Week 2 EOC: Chapter 2 Question 4

a. Even though both methods ended with a net profit, Laura's Cash Accounting method ended with a Net Loss of ($7,850). "Those businesses that routinely generate cash in excess of their immediate needs for it are said to have a “positive cash flow.”. That is, more cash is flowing into the business than is being removed from it. Those businesses that do not generate enough cash to support their operations are said to have a “negative cash flow." Dopson, Lea R. Managerial Accounting for the Hospitality Industry. Wiley, 09/2008, pg.143. VitalSource Bookshelf Online.

b. Laura's Cash Accounting method shows the most accurate amount of money on hand to pay bills.

c. Lisa's Accrual Accounting accurately shows the revenues generated regardless of when they were received.

d. Laura's Cash Accounting most accurately shows the expenses incurred regardless of when they were paid. "While many in business feel that cash inflows from interest or dividends would be better considered as investing or financing activities, the FASB classifies them as operating activities (which means you must also!)." Dopson, Lea R. Managerial Accounting for the Hospitality Industry. Wiley, 09/2008, pg.157. VitalSource Bookshelf Online.

e. Lisa's Accrual Accounting method most accurately shows actural cash inflows and outflows.

f. Lisa's Accural Accounting method shows the most accurate reflection of their resturant's true profitability. "The accrual system instructs accountants to record expenses when they are incurred regardless of when they are paid". Dopson, Lea R. Managerial Accounting for the Hospitality Industry. Wiley, 09/2008, pg.49. VitalSource Bookshelf Online.

Week 1 EOC: Chapter 1, Question 3

a. Is it legal?

Yes this is legal but also unethical she knew about the late delivery issue and the maples should have been given to the company not used for a party. "Sometimes it may not be clear whether an actual course of action is illegal or simply wrong. Put another way, an activity (including an accounting activity) may be legal, but still the wrong thing to do" (Dopson, Lea R. Managerial Accounting for the Hospitality Industry. Wiley, 09/2008. VitalSource Bookshelf Online.)" If there are no company policies forbidding the acceptance of "gifts", then it is probably legal to take the hot dogs home.

b. Does it hurt anyone?

No it did not the hot dogs were free and the company will still receive their delivery weather it is late or not. The two cases of hot dogs would benefit laurine because she would be using them for her personal barbecue. These cases technically are the property of the business, not the manager. The cost of these cases will most likely be paid by her business through future price increases.

c. Am I being honest?

She was being totally dishonest. She could have told the company about the samples and they could have given them to their customers as a promotional event to generate business. She may not be able to professionally handle future problems with the supplier, especially if she feels that the supplier will "reward" her again for future mistakes.

d. Would I care if it happened to me?

Yes I would care because if my food purchaser was not including me with this type of information I would question her loyalty to my business. Even the smallest things can make or break the business, keeping cost low is a major factor.

 

e. Would I publicize my action?

No I would not, having a barbeque with friends is disrespectful. She probably would not want her boss to know.

f. What should be done with the two cases of hot dogs?

The two cases should have been given to the owner/company so they could use them to drive more customers to their business. The company could have created a promoation and maybe do some social media advertising to get the word out.