In the case study of the Kansas City Zephyrs Baseball Club, Inc. Bill Ahern the arbitrator was assigned to resolve the issue on the parties’ agreeing on the true profitability of the major league baseball teams. Both Zephyr’s owners and players disagree on three different areas: a) Roster depreciation, b) Overstated Player Salary Expense which entails current signing bonuses, roster salary, amortization of and non-roster guaranteed contract expense; and c) Related-Party Transactions (Stadium Operations)
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Kansas City Zephyrs Case Study Chad Dellworth Case: Kansas City Zephyrs Baseball Club: A Baseball Accounting Dispute ACCT 6350 1. How Should Bill Ahern resolve each of the accounting conflicts between the owners and the players? After meeting with both the owners and the players, Bill concludes that the three main accounting areas of concern between both parties are: * 1) Roster depreciation * 2) Player compensation * 3) Owners’ stadium fees In all of three of these conflicts
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Kansas City Zephyrs Baseball Club, Inc. Answer and submit these two questions for each item in dispute: Who's correct and why? for the Kansas City Zephyrs (6 points). In this baseball accounting dispute case I would rule towards the side of the players. First and foremost, their case on roster depreciation is a good point, because one, this is not done in any other industry when referring to staff or labor, and from a performance standpoint the way you may be able to determine if depreciation
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Focus of the Class: Accounting reports are often used in contracting. In this situation, baseball team owners and the players differ on the financial results of operations. An arbitrator has to decide which income number best represents a team's financial performance for the purpose of arbitration. Questions: 1. Who do you think is correct about the true profitability of Kansas City Zephyrs – the owners or the players? a. both are correct on different issues and there is one issue
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KANSAS CITY ZEPHYRS BASEBALL CLUB Amortization of signing bonuses: Owners: They have considered “signing bonus” as an expense in the year they are paid (=$12540) Players: Think that signing bonuses are part of the compensation package and for accounting purpose the bonuses should be spread over the term of the player’s contract (=$7818) Our opinion: Agree with the player’s view that signing bonuses have to be capitalized and amortized over the lives of the contracts. This is because players are
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Kansas City Zephyrs Case This case is a good example of the “earnings game”. A dispute arose between the baseball team owners and the players association on the true profitability of the baseball business. The case describes 3 main areas for which the accounting is being disputed: * Roster depreciation * Player compensation * Current Roster Salary - Deferred Compensation * Amortization of Signing Bonuses * Non-Roster Guaranteed Roster Expense * Transfer pricing
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Katelynn Tax 1/18/16 Kansas City Zephyrs Baseball Club, Inc. 2006 There are five main points of difference between the accounting methods of players and owners. The five main differences appear in roster depreciation, current roster salary, amortization of signing bonuses, non-roster guaranteed contract expense, and stadium operations. The following paragraphs analysis the main points above. Owners take 50% of purchase price of $228 million and depreciate it for 6 years this amounts to $19,000
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Applying Accounting Principal to the Kansas City Zephrys Baseball Club Case Measurement Positions Roaster Depreciation Measurement Issues Player Compensation Stadium Expense 1. Owners’ Accounting The accounting follows the industry standard of accounting principles within the baseball field in essence the owners get to write off the declining market value of the player contracts as a loss while also counting the annual salaries paid the players as an expense. The financial statement account
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Case 1 Warren E. Buffett, 1995 How is Berkshire Hathaway’s business composition from Exhibit 1 different or similar today? Be specific. Provide an overall statement to describe Berkshire Hathaway’s performance over time compared to the S&P 500. Can you discern a trend in the investment decisions of Mr. Buffett and are his decisions consistent with the principals learned from his mentor Dr. Graham? Based on the types of company’s that BK now owns, have the Acquisition Criteria been
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The University of Illinois Executive MBA July 13, 2004 Tentative Syllabus Managerial Perspective on Financial Accounting Accountancy 401X; Fall 2004 Michael J. Sandretto, 225C David Kinley Hall (217) 244-6410 (office); (217) 352-4832 (home, before 10:30 p.m.) sandrett@uiuc.edu or michaeljsandretto@earthlink.net Texts: Antle, Rick, and Stanley J. Garstak, Financial Accounting, Southwestern (United States), second edition, 2004 (Antle). Palepu, Krishna G., Paul M. Healy, and Victor
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