How about going to see Julius Pryor at the Smyrna Kiwanis tomorrow (Wednesday) at 11:30 am? He spoke at the Roswell United Methodist Church Job Networking Ministry last month. I was impressed.
Price: free.
Place: Smyrna Community Center, located at 200 Village Green Circle
He speaks from his experience as a VP of Coca Cola and a former naval captain on achieving excellence in your life and in your career.
Regarding Tax Treatment of Divorces:
Did you know that alimony payments are deductible to the person having to pay, and taxable income to the person receiving it?
Child support, on the other hand, is not deductible or taxable. That's supposedly something parents would have to pay for their children whether they stayed married or not.
Rich people generate passive income. This means that money comes in from some business or property without them actively working on it.
There is only so much that one person can do; hence only so much money he can earn from his own activity. Real money comes from multiple activities, hence Kiyosaki's emphasis on passive income.
Now how can I get me some of that?
Been working on payroll. This is the month for all good CPA's to come to the aid of their country - and their clients by getting that payroll done. Also been worrying about 1099's, too.
Just as I get that done, the time for doing 1040's has come. Whew!
Since there's so much confusion at the USCF, Wick, and others, I'll make one last post on this issue.
Was their legal liabilities reduced by $39,000 or not? About that crack about "HONESTLY portrayed that way" (see below) have you checked with the IRS regarding rules on taxable income? A phone call may help you guys clarify the matter of debt cancellation being income.
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Confusion Alert: Susan owes money to the lawyers; her lawyers did not owe money to Susan. It was her debt (not the lawyers') that was partially cancelled by the insurance payment. This seems to the point which is leading the USCF, Wick, and others astray.
I'm doing Continuing Professional Education (required for my CPA license) and today I reviewed the Statement of Cash Flows.
This is one of the major financial statements. It answers the question, "My Income Statement says I'm making a profit, so where did all my money go?" This is The Big Question people have asked me for years and years.
The problem is that some of the profit came from accruals, such as deferred revenues that became "undeferred" and now hits Income. Not all expenses were cash outlays, either. Depreciation, for example.
The question is further complicated when money goes out for non-income items. Buying or selling fixed assets, for example. Another is loan payments.
The Statement of Cash Flows answers the Big Question this way.
It starts out with the Net Income from the Income Statement. Then there's a bunch of line items called "Operating Activities". These take care of most of those pesky accrual things.
Next is a group called "Investing Activities". As the title indicates, these are buying and selling stocks and bonds. It also includes buying and selling fixed assets, though this has always struck me as confusing.
Finally, there's "Financing Activities". A company can finance it's operations by issuing its own stock. It can also buy some of it back (Treasury Stock). More often, a company takes out a loan from the bank or someone else. These all go here.
Netting all these together gives you the net change in cash. Add into the mix the cash the company started the period out with and (Presto!) you've got the ending cash in the bank.
- Like magic, only like magic if you know the secret, the whole thing is logical.
Here's a great story from the New York Times. How to find your credit score and the best ways to mend it.
Did I forget to tell you? Last month I got certified on Quickbooks! Now, this month I plan on passing two more courses. I'm gunning for Advanced Quickbooks Advisor.
I'm not recommending this product but only because of the price.
As a device, it is delivers books, magazines, newspapers, and blogs far better than paper. It is smaller and lighter than a paperback book; the screen is easier to read than a paperback; and the fonts are adjustable. Most importantly of all, it can hold thousands of books in memory. Its wireless capability allows periodicals (such as newspapers) to be constantly updated.
As a business model, it is a device to drive sales of books, magazines, newspapers, and blogs. To the consumer it offers convenience (instant purchase from anywhere), portability (Kindle's small size), and price (no ink or paper). The convenience and pricing solves the problem that newspapers and other periodicals (including blogs) face from the internet: advertising alone does not produce enough revenue. Consumers have to pay to get their favorite periodicals on their Kindle. T
In the future, these subscription revenues can and eventually will be the salvation of the publishing industry, especially the periodical sector of it. In the same way tha manufacturers of computer printers make more money from the sales of ink cartriges than they ever do from the initial sale of the machine, so will it be from electronic book readers such as Kindle. They just have to realize that Kindle is a marketing machine, not an end product.
And this is why the asking price is too high.
There's a good series of books by Barron's under the "Business Review Books" label. They cover major areas of business management, like "Marketing", "Finance", "Accounting", and so on.
Robert Kiyosaky's "Rich Dad, Poor Dad" series explains fundamentals of personal finance in an entertaining way, though "The Total Money Makeover" by David Ramsay is more practical.
Sales is probably the most needed skill in business. Even in corporate environments, employees have to continually sell themselves. Zig Ziglar has written many titles on this subject. Pick any one; he basically re-wrote the same book many times.
On personal things, I can see the merit in the "Dress for Success" thing. It is important. I like behavior skills better. (Doesn't mean I'm better, just that I recognize their importance.) Try "Talk to Win" by Lillian Glass.
Robert Kiyosaky make a good point about using network marketing as a practical means to work on sales skills. Here's a good, practical book on this: "Your First Year in Network Marketing" by Mark Yarnell and Rene Reid Yarnell.
If you work in accounting like I do, be sure to keep an annual GAAP Guide. I use Wiley's.
My last three days have been spent in seminars. Thursday and Friday, I spent on tax seminars; today I spent on personal finance workshops.
Taxes: I've been using the Gear-Up self-study courses for years. The Land Grant University seminar produced by ROKA is the first live course I've been at in a long time. It is a good refresher course. Land Grant's workbook is first-rate! I'm not sure 2 days is sufficient to cover all of the material. ROKA's speakers are especially strong on the retirement area, which was good for me. I've always felt that I needed to learn a lot more to master this area of taxes. And despite all the courses I've taken over the years in this area, I always leave them feeling humbled - even those courses that specialize in this subject.
The gang in the picture above was in the personal finances workshop I took today. The picture was taken last summer. I love these guys! The accountants ought to be as energetic and supportive as this bunch is.
The three big areas of personal financial services are getting control over one's: debts, risks, and investments. Today was more future-oriented while taxes and accounting are more past-oriented.
Is your home as asset or a liability? Let's assume you own your home. Is it still an asset?
According to Rich Dad, Poor Dad (see my 12/1 post below), it is a LIABILITY! Why not an asset? While an accountant will say it is an asset; in the economic sense, it is a liability.
An asset is something that makes you money; a liability is something that costs you money. Sure, you may make a profit when you sell your home but will the costs include just the buy/sell prices? To determine whether you're ahead financially, you've got to include all the maintenance and upkeep costs as well. Yes, these costs are a part of your normal living costs - costs you have to incur anyway. This is precisely the reason your home is a liability.
Rich Dad's advise is to acquire things that make you money. He calls it "generating cash flow". Normal living expense is just that: normal living expense. The operative word here is "expense". Investments and income producing properties are outside of living expense.
And that is why your home is a liability, not an asset.
I was very impressed with this series of books. In these economic times, I believe that everyone can benefit from reading this. His biggest point is that if you are unwilling to increase your income by $150 to $200 per month, then your wasting your time reading these books.
The Boxed Set includes Rich Dad, Poor Dad; Cash Flow Quadrant; and Rich Dad's Guide to Investing. The other 2 books on the carousel add good advice. Since the books are written on an elementary level, that is why there is so much reading material.
I highly recommend this series.
Veteran users of this forum will remember the lengthy discussions in the spring of last year about the profitability of the USCF for FY 2007. We will remember the assertions of Sloan, Donna and others that the projected loss for the year would be $300,000 and the assertions by Bill G, Joel, Nolan, Grant P, and others that it would be somewhat less. What everyone agreed on was that the current amounts were unknowable until the auditors made the year-end adjustment for accrued membership revenues. This adjustment would be made well after the year ended. The consensus of all was that the margin of error in their estimates ran from $300,000 to zero. Donna and Sloan claimed a much higher margin but that was what Bill G, Nolan, and their crowd admitted to. In fact, the auditors reported out a small net profit for the year.
A lot of us outside observers thought that this was a very large margin of error. More significant, was the inability of the USCF to track profitability on an interim basis. (The issue of public reporting and transparency was a side issue to many of us.) What was important was management’s claim that not even they knew the true situation of the USCF’s profitability during the course of the year.
Management responded to concerns by saying that (a) the business was seasonal in nature and (b) membership accounting was too hard and costly. They also said that they were working on improvements. This was difficult for me to swallow whole because (a) the USCF is hardly the only business in the world that is seasonal in nature and (b) the USCF is hardly the only membership organization in the world, either. We wonder how come other organizations can keep track of their finances but the USCF can’t. 10% of a $3 million business is a pretty large margin of unknowability.
I gather from the statements made by Grant and Nolan in this thread that a custom routine is being written for their stand-alone membership DB that will generate a summary journal entry that can then be entered into the General Ledger Peachtree program by hand. This entire approach seems strange to me.
Let’s say I want to buy a car. Now I am sure that if Mike Nolan were to contract with me to build me a car, I am sure he would provide (after some time to be sure) a very nice custom built car that would exactly fit me and my needs. He would design it; he would clear out space in his garage to build it; and then it would be great. Heck, he would even drive it from Nebraska to Atlanta to deliver it to me. Or, I could just go down the street and buy a car off the dealer’s lot. I wonder what Nolan would charge me for his car?
What’s more expensive: buying specially designed stuff or store-bought stuff?
Grant Perks, chair of the Audit Committee responded to my questions yesterday on the USCF Forum. Thank you, Grant! He said, “Based on my previous discussions with Mike Nolan, he was writing a script that will generate a report of the deferred balance at the end of a period. From this report the journal entry can be calculated and booked to Peachtree. This method might lead to additional cost at year end since in addition to auditing the general ledger the auditors will likely have to audit the membership database.”
I responded with these points:
(a) Mike Nolan is doing all of this work for free?Grant is supporting an accounting change. I don’t understand why the delegates have to be involved in such a technical issue. We’re talking about simply conforming to generally accepted accounting principles here.
(b) How can auditing the numbers possibly be more expensive than the auditors developing them and then auditing them?
(c) Are you saying that the numbers from previous years do not come from actual DB’s of actual members paying actual money in actual transactions?
(d) If reported membership accruals in the past have not been coming from the above, then where have they been coming from?
(e) Assuming that the auditors calculated the year-end accrual from some schedule, they would audit that schedule, right? To avoid garbage in, garbage out. That schedule would be based upon something else, right? As the auditors drill down through the paperwork, they would eventually reach an actual DB representing actual members with actual transactions, right? Are you saying that they don’t – that the examination of the membership DB or some equivalent would be new?
What does “CAN DO THE JOB” mean? If it can do the job (I presume you capitalized the letters in order to emphasize this point), then why write script for a separate DB? Why even have a separate DB at all? Why did Grant make a point about the 5,000 entries per month? Do you mean by “CAN DO THE JOB” that it does great jobs other than accruing revenues?
As with many organizations, the USCF uses a variety of “shadow systems” (such as Excel spreadsheets) for accounting and reporting purposes. While functional, they do not integrate data; as we build new systems and integrate processes, we need to ensure that we can do our routine financial reporting and queries within our actual financial systems, such as our Peachtree accounting system. Only by getting these systems integrated and functional for reporting purposes will we be able to ensure the accuracy of the data.Source of quote
Mike Nolan of the USCF commented on Wednesday's post in the USCF Forum. He said that this would be a radical departure from current USCF practices.
What people may not understand is that each year, ongoing discussion about USCF finances are mooted by the large uncertainty of what the revenues are going to be reported. Last year, management continually stated that revenues would not be known until the auditors made the annual year-end adjustment.
But what is this adjustment and how do the auditors figure the amount?
What they have to do is to arrive at year end figure I did in the below post for all the members. They have to perform elaborate calculations in order to do this.
There are two problems with this approach: (1) More work has to be done at the back end by high priced labor (auditors) because the USCF does not do the necessary work at the front end by lower proced labor (bookkeepers using software) and (2) the USCF does not know it's true financial picture until after the year is over.
In short, the USCF has to play the game without knowing whether it is a pawn ahead or a pawn (or 2 pawns or more!) behind. Even after the game is over, it cannot look back at the score sheet and see how it was doing in the earlier phases of the game.
Here's my quickie version of how this would be done.
Assumptions: Donna pays $80 in May, 2008 for a 2 year membership. To simplify accounting, USCF policy is to count partial month as full month.
Entry in May, 2008.Then each succeeding month for the next 24 months 1/24 of the Donna's money is reclassified from deferred to actual revenue by the following entry.
Debit: Cash $80.00
Credit: Deferred Revenue $80.00
To record receipt of money from Donna A. for 2 years membership dues.
Debit: Deferred Revenue $3.33So at December 31, 2008 Donna's account will look like this:
Credit: Membership Revenues $3.33
To recognize revenues earned from Donna A's 2 years membership payment.
Deferred Revenue: $53.36 (80.00 - 26.64)At the end of May, 2009 the USCF closes it's books for the fiscal year end. That means that all the Revenue and Expense accounts are reset back to zero. But the monthly entry stays the same.
Membership Rev: 26.64 (8 months x 3.33 per month)
Donna's Total: $80.00 (53.36 + 26.64)
Debit: Deferred Revenue $3.33So, for June, 2009, here's what Donna's account will look like:
Credit: Membership Revenues $3.33
To recognize revenues earned from Donna A's 2 years membership payment.
Deferred Revenue: $36.67 (subtract 13 months x 3.33 per month = 43.33 from 80.00)Fund Balance is an equity account where the total of the previous years' revenues and expenses are closed to at the end of each year. And yes, since 40 does not divide by 12 evenly, there's going to be some rounding.
Actual Revenue: 3.33
Fund Balance: 40.00 (12 months x 3.33 per month)
Housing starts in the area have really slowed. As this is being written, authorities are divided as to whether we are heading into a recession. I think we are.
Usually in an election year, the economy does well. It is the year after the election when the economy tanks. So, this is recession is a surprise to me.
I've been doing my professional education for upcoming tax season. Yes, I do individual and corporate taxes as part of my CPA practice.
Here's some changes for this year's returns (CY 2007) due on 4/18/08:
This is from my friend Kurt Paasch.
Get a load of this ship! 15,000 containers and a 207' beam Notice that 207' beam means it was NOT designed for the Panama or Suez canal.
It is strictly transpacific. Check out the "cruise speed". 31 mph means the goods arrive 4 days before the typical container ship (18-20 mph) on a China-to-California run. So this behemoth is hugely competitive carrying perishable goods.
This ship was built in five sections. The sections floated together and then welded.
The ship is named Emma Maersk.
The command bridge is higher than a 10 store building and has 11 crane rigs that can operate simultaneously.
Country of origin - Denmark
Length - 1,302 ft
Width - 207 ft
Net cargo - 123,200 tons
Engine - 14 in-line cylinders diesel engine (110,000 BHP) Cruise Speed - 31 mph
Cargo capacity - 15,000 TEU (1 TEU = 20 ft3 container)
Crew - 13 people First Trip - Sept. 08, 2006 Construction cost - US $145,000,000+
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