Accounting John Haults Case Essay Example

Accounting John Haults Case Essay Electric utility bills. When an electric utility customer uses electricity, the electric company has earned revenues. It is obviously impossible, however, for the company to read all of its customers meters on the evening of December 31. How does the electric company know its revenue for a given year? Explain. According to historical data, the electricity usage usually tended to be fairly constant from month to month. The company can estimate the revenues for each month, by using historical data. Generally high fluctuation will not occur in electricity usage. We can easily estimate the monthly usage by the data of the same month last year. In this situation, if there is any inaccuracy we can adjust its estimation. Usually, the electricity usage is quite constant over time. Therefore, the company can estimate its revenues based on the data from the last year. If there is any inaccuracy, we can make adjustment in the following month. Retainer fee. A law firm received a â€Å"retainer† of $10,000 on July 1, 2006, from a client. In return, it agreed to furnish general legal advice upon request for one year. In addition, the client would be billed for regular legal services such as representation in litigation. There was no way of knowing how often, or when, the client would request advice, and it was quite possible that no such advice would be requested. How much of the $10,000 should be counted as revenue in 2006? Why? Only half of the â€Å"retainer† should be recognized. This is because, according to the Revenue Recognition Principle, we recognize the revenue when the service is rendered. At the end of the year, only six months of the services have been provided. We will write a custom essay sample on Accounting John Haults Case specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Accounting John Haults Case specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Accounting John Haults Case specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Even when the client would request advice in a particular month, we still recognize the revenue because our service has always been ready due to our responsibility. In other words, we have been provided the service throughout the year constantly. Half of the â€Å"retainer† which is $5,000 should be counted as revenue in 2006, the rest $50,00 should be recorded as unearned revenue. We consider â€Å"retainer† as a 1 year service contract no matter when the customer will request advice. Actually, we are always stand by for any request from the customer, which mean we are providing service throughout the year constantly. Once you may argue that there may not be any service provided during the rest year. Like the unearned revenue of rent, once they paid an unearned revenue will be recorded, and during the rest period, revenue will be record according to time, no matter the customer â€Å"use† the room or not. For example, in the next month, there will be a decreasing of $1/12X10,000 in unearned revenue and the same amount of increasing in revenue. Contract based on period. Standing-by service: how to recognize? Cruise. Raymond’s, a travel agency, chartered a cruise ship for two weeks beginning January 23, 2007, for $200,000. In return, the ship’s owner agreed to pay all costs of the cruise. In 2006, Raymond’s sold all available space on the ship for $260,000. It incurred $40,000 in selling and other costs in doing so. All the $260,000 was received in cash from passengers in 2006. Raymond’s paid $50,000 as an advance payment to the ship owner in 2006. How much, if any, of the $260,000 was revenue to Raymond’s in 2006? Why? Does the question of whether passengers were entitled to a refund in 2007 if they canceled their reservations make any difference in the answer? Why? According to the Revenue Recognition Principle, no revenue should be recognized in year 2006 because Raymond’s services started from January 23, 2007; revenue is recognized only when the company provides the service to its customers. The $260,000 is recognized as unearned revenue. If the customer cancel the reservations, both of the unearned revenue and the cash account of the company will be reduced. None of the revenue should be reported in 2006. Revenue should be recognized when the service is being received by customers. According to this case, customers received service after January 23, 2007, so the $260,000 is under unearned revenue account, but not revenue. If customer canceled their reservations, there will be a decreasing on both unearned revenue and cash, at a same amount. Accretion. A nursery owner had one plot of land containing Christmas trees that were four years old on November 1, 2006. The owner had incurred costs of $3 per tree up to that time. A wholesaler offered to buy the trees for $4 each and to pay in addition all costs of cutting and bundling, and transporting them to market. The nursery owner declined this offer, deciding that it would be more profitable to let the trees grow for one more year. Only a trivial amount of additional cost would be involved. The price of Christmas trees varies with their height. Should the nursery owner recognize any revenue from these trees in 2006? Why? According to the Revenue Recognition Principle, no revenue should be recognized in year 2006 because there was no transaction during the yaer 2006. No revenue should be recognized in 2006. Because the transaction did not happen during the year 2006. Unbilled† receivables. The balance sheet of an architectural firm shows a significant asset labeled Unbilled Receivables. The firm says this represents in-process projects, valued at the rates at which the customers will be charged for the architects time. Why would a firm do this instead of valuing projects in process at their cost, the same as a manufacturing firm would value its in-process inventory? Does it make any dif ference in the reported owners equity for the architectural firm to report such in-process work as receivables rather than as inventory? Why? For construction projects, it involves a long term process and accidents are so common in construction , which brings extra material cost and wages. So,it is hard to ascertain its cost until the project is finished. If such in-process work is reported as receivables, both revenue and expenses incurred are reported consistently,implying that the reported owner’s equity will increase consistently. However,if it is reported as inventory,the inventory used changes a lot across the construction time,owner’s equity will subsequently increases inconsistently. Because construction is a long term process and there is a written contract between an architectural firm and the customer, its revenue should be recognized according to percentage of completion. For an architectural firm, it won’t use the costs to represent the percentage of completion. Actually, it is very difficult to estimate total costs needed in the construction. During the progress, the total costs probably enhance because of lack of time or wrong use of material. The firm needs to fix the problem and therefore higher costs. As such a case is frequently happened in the progress, it makes estimating the costs difficult. Therefore, it would be better for the architectural firm to recognize revenue by the rates at which the customers will be charged for the architects time. And by using this method, the revenue and expense will be consistent during the architect’s time. Therefore, owners’ equity will increase fixed amount in the architect’s time . If the firm report such in-process work as inventory, as inventory used change a lot during the architect’s time, owners’ equity will not increase consistently. Premium coupons. A manufacturer of coffee enclosed a premium coupon with each $2. 50 (at wholesale) jar of coffee that it sold to retailers. Customers could use this coupon to apply to $0. 50 of the price of a new type of instant tea that the manufacturer was introducing and that sold for $2. 00 wholesale. The manufacturer reimbursed retail stores $0. 60 for each such coupon they submitted. The extra $0. 10 was to pay the grocer for coupon handling costs. Past experience with similar premium offers indicated that approximately 20 percent of such coupons are eventually redeemed. At the end of 2006, however, only about 10 percent of the coupons issued in 2006 had been redeemed. In recording the revenues for the company for 2006, what allowance, if any, should be made for these coupons? Why? If an allowance should be made, should it apply to all the sales revenue of coffee or to the sales revenue of tea? Why? Only 10percent of the coupons redeemed should be recorded as allowance (contra-revenue) which deducts the gross sales of tea. No allowance is needed to be applied to the sales revenue of coffee because the coupons only redeem for buying tea. Travelers checks. A bank sells a customer $500 of American Express traveler’s checks, for which the bank collects from the customer $505. (The bank charges a 1 percent fee for this service. ) How does the bank record this transaction? How does the transaction affect American Express’s balance sheet? $500 payment should be recognized as account payable because it is the liability we should pay to American Express. On the other hand, $5 should be recognized as revenue, for the bank provided the service. The cash account will be increased by $505 and the liability will be increased by $500. Like wisely, the retained earnings is increased by $5. First of all the bank purchases amount of traveler’s checks from American Express. It will increase both the inventory (under assets) and the account payable(under liability). Then the bank sell it at $505, we will record revenue of $505 and COGS of $500, it will also increase the cash by $505 and decrease the inventory by $500. American Express records the transaction as a $500 account receivable until the Bank sells the Traveler’s Checks for cash. Once the customer paid, bank will pay their payable by this amount of cash. American Express will reduce the account receivable, and increasing cash. Product repurchase agreement. In December 2006, Manufacturer A sold merchandise to Wholesaler B. B used this inventory as collateral for a bank loan of $100,000 and sent the $100,000 to A. Manufacturer A agreed to repurchase the goods on or before July1, 2007, for $112,000, the difference representing interest on the loan and compensation for B’s services. Does Manufacturer A have revenue in 2006? Why? The revenue should be recognized by the manufacturer A because the risk and reward of the ownership is transferred to the manufacturer B. For the reason that the manufacturer use this inventory as collateral for bank loan which implies the risk and the reward of the owner ship has been transferred to the wholesaler B. For a sale and repurchase agreement on an asset other than a financial asset, the terms of the agreement need to be analyzed to ascertain whether, in substance, the seller has transferred the risks and reward of ownership to the buyer and hence revenue is recognized. When the seller has retained the risks and rewards of ownership, even though legal title has been transferred, the transaction is a financing arrangement and does not give rise to revenue. In this case, company B used this inventory as collateral for a bank loan, and take risks of those merchandise, so the Manufacturer A have revenue in 2006. (Hong Kong Accounting Standard 18 Revenue) Franchises. A national real estate brokerage firm has become highly successful by selling franchises to local real estate brokers. It charges $10,000 for the initial franchise fee and a service fee of 6 percent of the brokers revenue thereafter. For this it permits use of its well-known name, and provides a one-week initial training course, a nationwide referral system, and various marketing and management aids. Currently, the franchise fee accounts for 25precent of the national firms receipts, but it expects that the United States market will be saturated within the next three years, and thereafter the firm will have to depend on the service fee and new sources of revenues that it may develop. Should it recognize the $10,000 as revenue in the year in which the franchise agreement is signed? Why? If it dose, what will happen to its profits after the market has become saturated? Why? In the year in which the franchise agreement is signed , the$10,000 should not be recognized as revenue because no service is provided. The recognition of the revenue should be matched with the expenses of providing services . If the $10,000 is recognized as revenue, the firm’s profit will drop greatly after the market has become saturated. As the franchise fee accounts for 25 percent of the national firms receipts, the saturation of the market and the recognition of the whole franchise fee in which the franchise agreement is signed implies that the profit after year 3 will drop by 25 percent . If it does recognize the $10,000 as revenue in the year in which the franchise agreement is signed, the profits after the market has become saturated will be lower than the past three years suddenly. In the past three years, the company had franchise fee as revenue, which accounts for 25precent of the revenue. After these three years, however, the market will be saturated, which mean the company wont receive any franchise fee. Revenue will only be 75precent of the past three years. We can expect there will be a huge decrease of profits between year3 and year4. Therefore, we can say that the profit is not consistent if franchise fee is recognized in the year in which the agreement is signed. Computer systems. In the early 2006, the sales vice president of Tech-Logic reached agreement to deliver several computer systems with a total price of $570,000 to an organization in one of the newly independent countries established following the dissolution of the former Soviet Union. Tech-Logic management was very excited about this contract. The countries that were part of the former Soviet Union represented a major market that was just opening up for trade, and these countries especially needed the kinds of high-technology products that Tech-Logic sold. Tech-Logic manufactured and shipped the entire $570,000 order during 2006. Tech-Logic normally recognized revenue on the sale of its products when they were shipped. However, Tech-Logics controller wondered whether the same revenue recognition policy should apply to this contract. First, contract law in these countries was evolving and it was hard to know if certain laws existed or what they were. In addition, the controller was uncertain when Tech-Logic would receive the $570,000 in cash. He had heard that in many of these countries needed for foreign exchange, although the customer kept assuring Tech-Logic that they would receive cash shortly. The controller pondered whether to recognize the entire $570,000 as revenue in 2006. If not, then when should this revenue be recognized? Why? The $570,000 should not be recognized as revenue in 2006 as the payment is not reasonably assured. Although the customer kept assuring Tech-Logic that they would receive cash shortly, no evidence can sure the payment, in addition to the lack of foreign exchange. Since revenue should be recognized only when the payment is assured, the revenue should be recognized when the payment is received or when it is sured that there is the contract law to guarantee the payment in this case. If it is confirmed that no payment can be received,a loss of inventory should be recorded. The revenue should not be recognized when they shipped. In revenue principle, is says that we generally considers revenue to be realized and earned when collectibility of the sale proceeds is reasonably assured. (Securities and Exchange Commission). In this case, the customers country did not have any contract law to protect this deal and lacking foreign exchange, all of these indicate that we are not sure whether we can receive cash or not. We cannot record revenue when the goods are delivered, because the risk of loss has has not passed to the customer, even it has been shipped. We suggest recognize the revenue when the cash receive, or the contract become legitimated. If we confirm that the cash will never receive, that means the company suffer a loss of value of shipped inventory. STEP1(when goods shipped) STEP2(if we receive cash or other valid note) Dr. Cash/Receivable570,000 Cr. Revenue570,000 or STEP2(if we confirm that we will not receive the money) Dr. Loss X Cr. Inventory X

Starry Night essays

Starry Night essays I chose The Starry Night by Vincent Van Gogh because it is a very well known piece of art. People throughout time have always looked at this piece of art as one of the most fascinating pieces of all time. I became interested in this piece and began reading articles about it. According to what I read, Starry Night was painted while Van Gogh was in an asylum. His behavior was very erratic at the time, which can be the reason for some of the things shown in this piece of art. A poem by Anne Sexton called, The Starry Night, was created through a letter Van Gogh had written his brother. Through Anne Sextons poem and the painting by Van Gogh, I am able to get a feel on what exactly Van Gogh was portraying in this piece of art. The first thing I noticed when I looked at this piece is the sky. The starry sky occupies more than half of the painting. In the sky, there is an orange and yellow moon along with eleven bright white and yellow stars. The sun and all of the stars are surrounded by bright rings of light. According to Anne Sexton, The night boils with eleven stars (line 4). Left of the center, it looks as though there is something dark and evil towering over the village. The large figure, which appears to be a tree, looks like black flames. It stands alone on the top of a hill looking at the sky and the village. According to Anne Sexton, The old unseen serpent swallows up the stars. (10). The tree, covering part of the mountains, sits still and is untouched by the wind or the light reflected by the bright sky. It remains alone, separated from the remainder of the painting as if it was not even a part of it. To the right of the painting, there is a small town with houses, a church, and some large blue hills. The church sits in the middle, almost as the focal point of the painting. Even though it is night, there are no lights shining down on the city. Due to the absence of light ...

A Biography of US Senator Rand Paul

A Biography of US Senator Rand Paul Rand Paul is a Republican United States Senator from Kentucky with conservative-libertarian view points, and the son of former Congressman and regular presidential candidate Ron Paul. An eye doctor by trade, Paul has been married to his wife, Kelly, since 1990 and together they have three sons. While Paul has limited political history, he was a frequent campaigner for his father and also the founder of a pro-taxpayer group in Kentucky, Kentucky Taxpayers United. Electoral History: Rand Paul has a very limited political history and did not make a run for political office until 2010. Although he started as a double-digit underdog to Trey Grayson in the GOP primary, Paul took advantage of the anti-establishment sentiment within the Republican Party and was one of many long-shot outsiders to oust GOP-backed candidates. With the backing of the tea party, Paul went on to defeat Grayson 59-35%. Democrats believed they had a decent chance in the general election against Paul due to his lack of political experience. They party picked the fairly popular state Attorney General, Jack Conway. Though Conway led in early polling, Paul went on to win by a fairly comfortable 12 points. Paul was backed by most conservatives and tea party groups, including Jim DeMint and Sarah Palin. Political Positions: Rand Paul is a conservative-libertarian who is ideologically-aligned with his father, Ron Paul, on most issues. Paul is staunchly in favor of states rights on most issues and he believes that the federal government should only legislate where it is constitutionally authorized to do so. He believes hot-button issues such as gay marriage and marijuana legalization should be up for each state to decide, which also seems to be an emerging opinion within the conservative movement. Paul has also been a major figure in minority outreach and a major proponent of criminal justice reform. Rand Paul is pro-life, which is perhaps where he deviates most from the larger libertarian movement. He opposes federal funding of almost everything, including abortion, education, healthcare and other extra-constitutional issues that are meant to be handled by each individual state. The main area of concern for conservatives regarding Paul is on foreign policy. While Paul is clearly on the less interventionist and less activist scale of foreign policy, he is not quite the extremist his father was on the issue. He is strongly opposed to NSA spying programs. 2016 Presidential Run: Picking up where his father left off, Rand Paul announced a run for the 2016 GOP nomination for President. While he started off with decent numbers, his popularity took a dip as he suffered a handful of poor debate performances. While his father often occupied the wild outcast role in presidential elections, Rand Pauls more measured approach actually seems to have hurt him. The anti-establishment crowd drifted away from the Ron Paul/Rand Paul side and over to Donald Trump and Ted Cruz, both who have out-maneuvered Paul. His foreign policy views have also become a liability as the Republican Party has shifted back to a more hawkish stance following the off-hands approach of the Obama White House. This has led to the occasional back-and-forth between Paul and fellow contender Marco Rubio, who has typically came out for the better. Financially, the Paul campaign has struggled and it has remained in the bottom rung of candidates. His polling has also lagged, and he has constantly struggled to remain above the debate threshold. Some Republicans have called for Paul to give up on the race and instead focus on his 2016 Senate run as they fear he is wasting valuable resources while damaging his personal popularity.

A Biography of US Senator Rand Paul

A Biography of US Senator Rand Paul Rand Paul is a Republican United States Senator from Kentucky with conservative-libertarian view points, and the son of former Congressman and regular presidential candidate Ron Paul. An eye doctor by trade, Paul has been married to his wife, Kelly, since 1990 and together they have three sons. While Paul has limited political history, he was a frequent campaigner for his father and also the founder of a pro-taxpayer group in Kentucky, Kentucky Taxpayers United. Electoral History: Rand Paul has a very limited political history and did not make a run for political office until 2010. Although he started as a double-digit underdog to Trey Grayson in the GOP primary, Paul took advantage of the anti-establishment sentiment within the Republican Party and was one of many long-shot outsiders to oust GOP-backed candidates. With the backing of the tea party, Paul went on to defeat Grayson 59-35%. Democrats believed they had a decent chance in the general election against Paul due to his lack of political experience. They party picked the fairly popular state Attorney General, Jack Conway. Though Conway led in early polling, Paul went on to win by a fairly comfortable 12 points. Paul was backed by most conservatives and tea party groups, including Jim DeMint and Sarah Palin. Political Positions: Rand Paul is a conservative-libertarian who is ideologically-aligned with his father, Ron Paul, on most issues. Paul is staunchly in favor of states rights on most issues and he believes that the federal government should only legislate where it is constitutionally authorized to do so. He believes hot-button issues such as gay marriage and marijuana legalization should be up for each state to decide, which also seems to be an emerging opinion within the conservative movement. Paul has also been a major figure in minority outreach and a major proponent of criminal justice reform. Rand Paul is pro-life, which is perhaps where he deviates most from the larger libertarian movement. He opposes federal funding of almost everything, including abortion, education, healthcare and other extra-constitutional issues that are meant to be handled by each individual state. The main area of concern for conservatives regarding Paul is on foreign policy. While Paul is clearly on the less interventionist and less activist scale of foreign policy, he is not quite the extremist his father was on the issue. He is strongly opposed to NSA spying programs. 2016 Presidential Run: Picking up where his father left off, Rand Paul announced a run for the 2016 GOP nomination for President. While he started off with decent numbers, his popularity took a dip as he suffered a handful of poor debate performances. While his father often occupied the wild outcast role in presidential elections, Rand Pauls more measured approach actually seems to have hurt him. The anti-establishment crowd drifted away from the Ron Paul/Rand Paul side and over to Donald Trump and Ted Cruz, both who have out-maneuvered Paul. His foreign policy views have also become a liability as the Republican Party has shifted back to a more hawkish stance following the off-hands approach of the Obama White House. This has led to the occasional back-and-forth between Paul and fellow contender Marco Rubio, who has typically came out for the better. Financially, the Paul campaign has struggled and it has remained in the bottom rung of candidates. His polling has also lagged, and he has constantly struggled to remain above the debate threshold. Some Republicans have called for Paul to give up on the race and instead focus on his 2016 Senate run as they fear he is wasting valuable resources while damaging his personal popularity.

A Biography of US Senator Rand Paul

A Biography of US Senator Rand Paul Rand Paul is a Republican United States Senator from Kentucky with conservative-libertarian view points, and the son of former Congressman and regular presidential candidate Ron Paul. An eye doctor by trade, Paul has been married to his wife, Kelly, since 1990 and together they have three sons. While Paul has limited political history, he was a frequent campaigner for his father and also the founder of a pro-taxpayer group in Kentucky, Kentucky Taxpayers United. Electoral History: Rand Paul has a very limited political history and did not make a run for political office until 2010. Although he started as a double-digit underdog to Trey Grayson in the GOP primary, Paul took advantage of the anti-establishment sentiment within the Republican Party and was one of many long-shot outsiders to oust GOP-backed candidates. With the backing of the tea party, Paul went on to defeat Grayson 59-35%. Democrats believed they had a decent chance in the general election against Paul due to his lack of political experience. They party picked the fairly popular state Attorney General, Jack Conway. Though Conway led in early polling, Paul went on to win by a fairly comfortable 12 points. Paul was backed by most conservatives and tea party groups, including Jim DeMint and Sarah Palin. Political Positions: Rand Paul is a conservative-libertarian who is ideologically-aligned with his father, Ron Paul, on most issues. Paul is staunchly in favor of states rights on most issues and he believes that the federal government should only legislate where it is constitutionally authorized to do so. He believes hot-button issues such as gay marriage and marijuana legalization should be up for each state to decide, which also seems to be an emerging opinion within the conservative movement. Paul has also been a major figure in minority outreach and a major proponent of criminal justice reform. Rand Paul is pro-life, which is perhaps where he deviates most from the larger libertarian movement. He opposes federal funding of almost everything, including abortion, education, healthcare and other extra-constitutional issues that are meant to be handled by each individual state. The main area of concern for conservatives regarding Paul is on foreign policy. While Paul is clearly on the less interventionist and less activist scale of foreign policy, he is not quite the extremist his father was on the issue. He is strongly opposed to NSA spying programs. 2016 Presidential Run: Picking up where his father left off, Rand Paul announced a run for the 2016 GOP nomination for President. While he started off with decent numbers, his popularity took a dip as he suffered a handful of poor debate performances. While his father often occupied the wild outcast role in presidential elections, Rand Pauls more measured approach actually seems to have hurt him. The anti-establishment crowd drifted away from the Ron Paul/Rand Paul side and over to Donald Trump and Ted Cruz, both who have out-maneuvered Paul. His foreign policy views have also become a liability as the Republican Party has shifted back to a more hawkish stance following the off-hands approach of the Obama White House. This has led to the occasional back-and-forth between Paul and fellow contender Marco Rubio, who has typically came out for the better. Financially, the Paul campaign has struggled and it has remained in the bottom rung of candidates. His polling has also lagged, and he has constantly struggled to remain above the debate threshold. Some Republicans have called for Paul to give up on the race and instead focus on his 2016 Senate run as they fear he is wasting valuable resources while damaging his personal popularity.

Influential Business Leader Essay Example | Topics and Well Written Essays - 500 words

Influential Business Leader - Essay Example His success can be attributed to his unambiguous entrepreneurial quality, â€Å"dogged leadership† and of course his â€Å"philanthropic† interest. Bill Gates is no doubt the undisputed king of computer sciences and engineering. Born in 1955, he got acquainted with digital computers when he was in the seventh grade and after that he worked on several computer projects. His entrepreneurial ability was evident at a very early stage of his life when he along with his friend Paul Allen founded the company Traf-Data when they were still in school. In this company they used the Intel 8008 microprocessor to assist in monitoring and controlling the traffic of Seattle. He enrolled at Harvard but he never had a particular study plan so he had dropped out and went ahead with his friend to lay the foundation of his company, Microsoft. The writing of the software program, Altair BASIC, with the help of his friend Allen was the first biggest achievement of Gates. At the time of Bill Gates the knowledge about computers were very much limited. Being a man with creative thinking he took advantage of the situation and became an expert in program ming. His contribution towards the computer industry cannot be questioned. He is also a role model for generations to come as his success stories reveal hard work and â€Å"persistence†. (Emdee) Bill Gates’ is also very much known for his philanthropist activities. He has donated money all over the world and had played a major role in reducing poverty and also has helped in the enhancement of better medical facilities. He has also helped in the expansion of education all over the world. He has also donated to aid the aids victims. According to Forbes Magazine (2004), Bill Gates had been giving $29 billion for charities since 2000 (â€Å"Bill Gate’s philanthropy†). Bill Gates’ life had been like a fairy tale. A Harvard drop out to being the world’s richest man is a journey indeed very remarkable.

How fast-food has a significant impact in Childhood obesity Research Paper

How fast-food has a significant impact in Childhood obesity - Research Paper Example How fast-food has a significant impact in Childhood obesity? Childhood obesity is a serious/major public health concern and it currently getting a great amount of attention because of its wider economic impacts, as well as the long term consequences on children’s overall health, quality of life, academic achievements and productivity as they turn into adults. Fortunately, latest findings point out that the growth in the proportion of children categorized as obese or overweight has finally leveled off. Nevertheless, rates of obesity and overweight still remain high. â€Å"Almost 35% of children aged 6 to 19 years are overweight and roughly 19% are obese†. Taking health into consideration, the effects of obesity among children include coronary heart disease, hypertension, type 2 diabetes, orthopedic abnormalities and respiratory problems. One of the fields of the food industry, which is being held responsible for the prevalence of childhood obesity, is the FAFH – food-away-from-home – sector, in essence, the fast food industry. From the late 70’s till the mid 90’s, the volume of foods consumed away from home went up considerably from 16% to 29%. The eating patterns of children, particularly those in school, have echoed the fast growth of the FAFH industry. In the late 70’s, children obtained roughly 20% of their caloric intake from food FAFH sources. The data obesity surveys conducted from 2003 to 2006 show that food-away-from-home was liable for 35% of children’s caloric intake. A number of surveys have argued that children who take more fast-food have much lower dietary quality are also expected to be obese or overweight. This paper will discuss how fast-food has a significant impact in Childhood obesity. Background Whereas the main motivation of centering on children is the accessibility of geographically explicit information on weight measures for an extremely big sample, children are a significant group to research in their own right. â€Å"Among school aged chi ldren, 6-19 rates of overweight have soared from about 5% in the early 1970s to 16%, in 1999-2002† (Currie et al. 5). These rates are of significant concern provided that children who are obese are most expected to be obese or overweight as grownups and are gradually suffering from illnesses related to overweight when still young. Critics of the fast food sector point to a number of features, which might make fast food less healthy compared to other types of FAFH. These comprise of low time and monetary costs, high calorie levels of signature menu items and large portions. For sure, energy densities for personal food items are normally too high that it would be hard for people consuming them not to go past their normally recommended dietary intakes (Currie et al. 6). A number of consumers might be specifically defenseless. In two randomized practical trials concerning 26 overweight and 28 normal-weight children, Sinclair et al. (2833) contrasted caloric intakes on â€Å"unres tricted fast-food days,† as well as â€Å"no fast-food days.† The researchers found out that overweight children had much higher caloric intakes on â€Å"fast-food days† compared to â€Å"none fast-food days. The main fast food chains are also concerned in aggressive advertising to children. One particular experimental study of children aged three to five years provided them identical pairs of beverages and foods, the only distinction being that some foods were packaged by McDonalds (Robinson et al. 792). Data Sources and Summary Statistics Data for this paper came from three sources: school data and restaurant data. School Data The data on children from this study came from Californian schools from the late 90 and early 2000s up to 2007. The study of mostly 9th graders, which the paper centers on, represents 3.6 million student-year observations. In California, during spring, 9th graders are normally given fitness assessment test,