Chapter 11 Blog
Summary: One of the most famous casual clothing stores,the Gap has had difficulties maintaining its' sales standards. Gap has posted a second-quarter profit drop of 0.4 percent in sales in all four of its divisions. However, Gap strives to complete a successful turnaround by changing its brand and maintaining a smaller inventory. Gap has to face stiff competition from rivals such as Aeropostale and The Buckle, who have managed to achieve positive results with their young shoppers. Therefore Gap hopes to battle with its' competitors by focusing on advertising and marketing. In total, Gap had a net sales decline of $228 million, 7.3 percent to $3.24 billion
Connections: This article and chapter eleven have many things in common. Firstly, Gap is a type of merchandising business known as a retailer. A retailer is a business that buys goods from wholesalers and manufacturers and sells to the public. Gap has to deal with the two aspects of merchandise inventory, goods sold and goods not sold. If Gap sells its merchandise the amount is transfer ed to the Income statement, while the merchandise not sold becomes a Current Asset on the balance sheet. It can be shown as (Cost of beginning inventory) + (Cost of merchandise purchased) - (Cost of merchandise sold) = (Cost of ending inventory).
Reflections: From a teenager's point of view, i think that Gap will slowly perish into thin air. I have not bought any item from Gap since i was a little kid. They say that they are focusing on advertising and marketing, yet i haven' t seen a single add or change in their business ways. I also feel that their clothing is over priced for just a simple brand. As they have said in the article, there are many other stores to buy from that are much more attractive to the teenage eye. I will be amazed if the Gap can move away from the family business and become successful in this new fashion era.
Monday, October 12, 2009
Wednesday, September 16, 2009
Feds promise jail time for major fraud
http://www.cbc.ca/money/story/2009/09/15/white-collar-crime015.html
Summary: The article that i have just read explains that Canada has become known for the place for fraud. This is because of the lack of legislation that has been used against previous counterfeiters. The Federal Government plans to present a more serious legislation composed of mandatory penalties for fraud to allow longer sentences. Unfair penalties such as house arrest for only white collared workers will finally be abolished causing a more fair enviroment. In Canada, people currently that are convicted of fraud only serve one-sixth of the original sentence. For these reasons, Canada is considered to be lax on this type of crime, which definitely has to change. On Monday, two men from Alberta were convicted with fraud after using a Ponzi-type scheme that profited more than $100 million from investors all around the world. Tougher penalties seems to be the only resolution to hopefully raise the standards of Canada's protection against fraud.
Connection: The Major connection that i have found between this article and the textbook is the Generally Accepted Accounting Principles (GAAP). In the text book it states that the GAAP's consist of three main principles, the business entity concept, the continuing concern concept and the principle of conservatism. This article of fraud connects directly with the principle of conservatism because it states that accounting for a business should be fair and reasonable. An example of breaking this principle would be to overstate your profits and assets to present a fake image to your investors.
Reflection: After reading this article I feel very reluctant to entering the Canadian market due to reading about the numerous fraud crimes. If Canada does not protect its' economy how can we trust and have faith in our own market. It will also affect our investors around the world because they will be unsure if our market is legit. This will just be another obstacle that will make overcoming the recession even harder due to the lack of trust in our Canadian businesses.
Summary: The article that i have just read explains that Canada has become known for the place for fraud. This is because of the lack of legislation that has been used against previous counterfeiters. The Federal Government plans to present a more serious legislation composed of mandatory penalties for fraud to allow longer sentences. Unfair penalties such as house arrest for only white collared workers will finally be abolished causing a more fair enviroment. In Canada, people currently that are convicted of fraud only serve one-sixth of the original sentence. For these reasons, Canada is considered to be lax on this type of crime, which definitely has to change. On Monday, two men from Alberta were convicted with fraud after using a Ponzi-type scheme that profited more than $100 million from investors all around the world. Tougher penalties seems to be the only resolution to hopefully raise the standards of Canada's protection against fraud.
Connection: The Major connection that i have found between this article and the textbook is the Generally Accepted Accounting Principles (GAAP). In the text book it states that the GAAP's consist of three main principles, the business entity concept, the continuing concern concept and the principle of conservatism. This article of fraud connects directly with the principle of conservatism because it states that accounting for a business should be fair and reasonable. An example of breaking this principle would be to overstate your profits and assets to present a fake image to your investors.
Reflection: After reading this article I feel very reluctant to entering the Canadian market due to reading about the numerous fraud crimes. If Canada does not protect its' economy how can we trust and have faith in our own market. It will also affect our investors around the world because they will be unsure if our market is legit. This will just be another obstacle that will make overcoming the recession even harder due to the lack of trust in our Canadian businesses.
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