Accounting 12- Chapter 12

http://www.cbc.ca/consumer/story/2008/10/29/pe-gas-discounts.html

Summary:

A gas bar in P.E.I called Wilson Fuel has been told by the provincial regulator to stop giving a two-cent-a-litre discount to consumers who pays cash for gasoline. The Regulatory and Appeals Commission complained that Wilson Fuel was charging less than the regulated minimum price for gas. The area manager for Wilsons Fuel saw the offer as being similar to incentives offered at other gas station such as Petro-Canada and Esso. He said that they are offering the money back to consumers because credit card charges two per cent when it is used. This mean they are trying to rebate back what consumers would usually pay to Credit Card Company. In the end, IRAC ordered Wilsons Fuel to stop the cash discounts.

Connection:

The connection between this article and chapter 12 is cash discount. Wilsons Fuel is offering two-cent-a-litre discount which is similar to what I learned in chapter 12, which are 2/30,n/30 and 1/15,n/60. Just like Wilsons Fuel discount, 2/10,n/30 and 1/15,n/60 gives there customers discounts if they meet a certain requirement. Wilson Fuel only gives discount if its customer pays cash and 2/10,n/30 and 1/15,n/60 that only gives customer discount if they pay early. The difference between then is the transaction differs.

Reflection:

I do not think the IRAC should stop Wilsons Fuel to stop giving discount to the consumer because it should be their choice to stop or not to stop the discount. Even if they are charging below minimum gas price, it is their decision to earn or lose money. All they are doing is helping consumer get back the money from all the time they had paid the extra money when using credit cards. The way Wilsons Fuel is giving discount is similar to what Petro and Esso are doing, so I think it is unfair that they are not allowed to do this.

Accounting 12- Chapter 11

http://www.canada.com/vancouversun/news/business/story.html?id=04512417-9379-4436-9e35-27e59a63f325

Summary:

This article is about a small business that makes $500,000 in profit. The name of this store is Wilkinson’s Automobilla. This store has been around for 20years and Ted Wilkinson (the owner) and his brother started it up. Today Ted Wilkinson and his wife own the store. During 1989, this business only makes around $75,000 a year, but today, this business makes around $500,000 a year. This Store has about 25,000 magazines, 5,000 manuals and roughly, 9,000 items that are featured in his store and website. Wilkinson’ Automobilla has only three employees, but makes $500,000 profit.

Connection:

The connections I made between the article and Chapter 11 are merchandise inventory and sales. In the very beginning of chapter 11, I learned about merchandise Inventory. This relate to this article because the article states that Wilkinson Automobilla has about 25,000 magazines, 5,000 and 9,000 items that can be featured in his store, which means that this is his store’s merchandising inventory. This article also somewhat relates to the cash sales in the text because Wilkinson’s store revenues are mostly cash sales.

Reflection:

This article reminds people with small business that not only big businesses can earn large amount of profit, but small businesses can too. I think this article can help inspire small businesses to work harder in order to earn the small amount of profit as the Wilkinson’s do. It is great that this article stated the items that can be featured in this store because it is important for any businesses to know the amount and kind of merchandises that they have on hand. If a business does not know what they have on hand, they might buy too of one item and not restocking another. By doing a business like this, the consequence will be bankruptcy.