Teaching math in 2002

[JoeRT]

Teaching Math in 2002: A logger sells a truckload of lumber for $100. His cost of production is $120. How does Arthur Andersen determine that his profit margin is $60?




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Joe Torsitano
www.weatherforyou.com

[Deb]

A logger sells a truckload of lumber for $100. His cost of production is $120. How does Arthur Andersen determine that his profit margin is $60?

Hmmm

a) He owns the gas/oil company that the trucker had to pay to move the logs. Since these prices were so high it raised Arthur's profit margin beyond the loss of the sale itself.

b) The logging sale was part of a company he uses as a tax write off... the goal is loss since it turns into a gain from the tax savings...

Deb
- Easy as 1.. 2... 3bil

[rjdriver]

A city boy, Kenny, moved to the country and bought a donkey from an old
farmer for $100. The farmer agreed to deliver the donkey the next day. The next day the farmer drove up and said, "Sorry son, but I have some bad news, the donkey died." Kenny replied, "Well then, just give me my money back." The farmer said, "Can't do that. I went and spent it already." Kenny said, "OK then, at least give me the donkey." The farmer asked, "What ya gonna do with him?" Kenny, "I'm going to raffle him off." Farmer, " You can't raffle off a dead donkey!" Kenny, "Sure I can. Watch me. I just won't tell anybody he is dead.! "

A month later the farmer met up with Kenny and asked,
"What happened with that dead donkey?" Kenny, "I raffled him off. I sold 500 tickets at two dollars a piece and made a profit of $898." Farmer, "Didn't anyone complain?" Kenny, "Just the guy who won. So I gave him his two dollars back."

Bob

[Mandi]

Well, I can't find it online, but the Palm Beach Post distributed a great editorial cartoon lately (and it just showed up in our paper yesterday)I'll just summarize it: A man, standing at a blackboard that says - Accountant Math: 2 + 2 = The Fifth

[TVB]

Arthur Anderson:

Your profit is your cost minus any executive bonuses. The actual number means nothing.

[Rich]

Teaching Math in 2002: A logger sells a truckload of lumber for $100. His cost of production is $120. How does Arthur Andersen determine that his profit margin is $60?

That's an easy one:

$100 - lumber sold
- $120 - cost of producing the lumber
+ $80 - future value of trees planted today to replace lumber
---------
$60 - profit

[ryount]

I can't figure out how to make it only $60, my way keeps coming out higher.

Acme Global Lumber books the $120 cost of the lumber as a fixed asset, they then sell it to Acme American Lumber for $60 who in turn sells it for $100 to the client. When you consolidate the financial statements the combined profit is $100. Acme American will probably never pay Global for the lumber though.

I think I confused myself!

[chilihorse]

Assuming he cut the timber on federal land where the Forest Service determined the standing value to be $40.00 and he traded the rights to 4000 acres of sagebrush to the Army Corps to build a dam while agreeing to leave 10 acres surrounding the stinky purplelousewort {endangered weed) to the Nature Conservancy in a blind trust administered by the Rockefeller Foundation, within the tax laws of Moldovia where the logger is incorporated, Arthur Anderson would be correct under US law in submitting a profit of $60 for Federal tax purposes.