Today, I'm going to teach two students how to play the difference game. So what they're going to do is they're going to first take a card each, and cards they got were seven and four. And so what they're going to do with pennies, he's going to take seven pennies and he's going to place them in a line. He's going to take the number one. That's on her card, which is a fair place. They're right underneath where he placed his. What number did you get? You want to take those pennies?


Welcome to the National Archives and Records Administration's 2022 Genealogy Series. We are pleased to present this educational series of lectures on how to conduct family research using the 1950 Census. My name is Andrea Matney, and as the program's coordinator, please allow me to do a quick introduction and provide instructions on how to participate. These lectures will demonstrate how to use records from the 1950 Census and other federal resources for genealogical research. Our presenters include experts from the National Archives and Records Administration and the U.S. Census Bureau. Sessions are intended for beginners to experienced family historians. All are welcome. We invite you to join the conversation. Please participate with the presenters and other family historians during each session's premiere. You can ask questions via chat by first logging into YouTube. Keep your eye on the chat during the broadcast because the speaker will answer your questions there in the chat. Type your questions in at any time, but please keep your questions on today's topic. In addition, find live captioning, handouts, and the events evaluation form under the video box by clicking on Show More. Note on our schedule that all sessions are broadcast on Wednesdays at 1 p.m. Eastern. And yes, all of the recorded videos will remain available for viewing later and at any time. Mapping the 1950 Census, Census Enumeration District Maps at the National Archives. I'm pleased to welcome our presenter today, Randy Oswald. Ms. Oswald is a supervisory archivist in the Cartographic Branch at the National Archives at College Park, Maryland. She started with the National Archives in 2015 as an archives technician and joined the Cartographic Branch in 2016. Randy holds a master's of arts degree in public history from West Virginia University and a bachelor's of arts degree in history and anthropology from Heidelberg University. Randy, I am so pleased that you're with us today. I am now turning the program over to you. Great, thank you, Andrea. As has been mentioned, our presentation today will focus on Census Enumeration District Maps, which are held by the National Archives. First, what exactly is a Census Enumeration District? Enumeration Districts, also called EDs, are defined as an area which could be covered by a single Census Enumerator, or Census Taker, in one Census period, or about two to four weeks depending on whether an area was more urban or rural. Beginning with the 1930s Census, EDs were identified by a two-part number with a prefix to designate the county or city and a suffix to designate the individual district number. Examples are shown on the slide. Boundaries of Enumeration Districts were defined by the Census Bureau staff using guidelines outlined in official publications like the booklet shown here. Enumeration District boundaries were defined by existing political boundaries like counties, cities, wards, districts, or precincts. Enumeration Districts stayed within this type of political boundary to make it easier to gather statistical data from the Census. Boundaries also followed natural or man-made physical features like waterways, roads, railroads, or large properties such as cemeteries, parks, or institutions like prisons. ED boundaries and ED numbers often changed from one Census period to another, so if you know the ED for your relatives in the 1940 or 1930 Census, it will not necessarily remain the same for the 1950 Census. This is because of shifting populations, especially after World War II, and changing political boundaries such as changes to city limits. We will next look at some examples of Enumeration Districts. Census Enumeration Districts varied in size depending on the population of an area. In densely populated areas like New York City, Enumeration Districts were often quite small, encompassing at times only a single apartment building or city block as seen on this map of Manhattan. On this map, the Enumeration Districts are shown in orange, 1466, for example, and blue-circled numbers represent Census tract numbers. Enumeration Districts in smaller towns like Denison, Ohio, or Central Falls, Rhode Island were larger, covering multiple cities, city blocks, or in some cases, large portions of the town. In the Denison, Ohio example, the EDs follow ward boundaries with wards written in green. In the Central Falls example, Enumeration District boundaries follow major roads and also follow ward boundaries, although there are multiple Enumeration Districts within each ward. Ward numbers and boundaries are shown in green. Rural areas with smaller and more spread out populations typically had larger Enumeration Districts. Enumerators were also allotted more time to complete the Census for these larger areas, four weeks instead of just two. Boundaries often followed existing political lines such as those for townships in the case of Brown County, South Dakota, or sometimes for districts or other political divisions. As was mentioned earlier, Census Enumeration Districts often did not remain the same from one Census period to another. Here is an example of maps from the 1940 and 1950 Census covering Bronxville, New York. In 1940, Bronxville had only six Enumeration Districts, 60-24 through 60-29, shown on the black and white map on the left. While in 1950, it had 12 Enumeration Districts, 60-34 through 60-46. Note that the Enumeration Districts between these two years are different as well. So why are EDs helpful to researchers? First, the Census was organized by Enumeration District number. Knowing the ED number for where a specific person lived can be fundamental to locating a person on the Census population schedule. Especially at first, the name indexes for the Census are often inaccurate due to bad handwriting or transcription or OCR errors along with other issues. Names might have also been misspelled by enumerators, making some individuals difficult to locate when searching by name only. Additionally, common names can lead to numerous search returns, especially in large cities, for example, searching for John Smith in Manhattan. Knowing the ED number can also allow researchers to look up who lived at a specific location without first needing to know the name. For example, if you want to see who lived in your house in 1950. How does someone go about locating the Enumeration District for a specific location? One way is to use Census Enumeration District maps. ED maps were maps created to visually show the boundaries of an Enumeration District. The maps were then used by enumerators on the ground during their work. The Census Bureau created these maps using base maps or maps that already existed. These included a variety of map types, such as soil survey maps, city, state, or county, government maps, Chamber of Commerce or other local maps, general highway maps, commercially produced maps, and many others. The base maps were annotated using colored pencils or crayons to show Enumeration District boundaries, numbers, and other relevant features, such as ward or precinct boundaries, township boundaries, and names, and things like city limits. The map on this slide illustrates Census Enumeration District boundaries for a town in Ohio. The ED numbers and boundaries are shown in orange, which is typical for the census, and other boundaries, in this case, ward boundaries, and the words fourth ward, which are shown in green, although the colors can sometimes vary. Here are a few examples of base maps used by the Census Bureau. The first example is for Sylvania, Georgia, and the base map used is a sanitary survey map. Our next example, a map of Rackport, Massachusetts, is a locally or commercially produced map, possibly made for tourists or visitors, which shows local points of interest, including beaches, churches, and parks. Many of the base maps used were general highway maps, similar to this map for Lewis County, West Virginia. These maps often do not include many details, showing only highways in the locations of cities or towns within a county. As was previously mentioned, enumeration district numbers are comprised of two parts, a prefix for the county or city, and a suffix for the district number, such as 32-30 for an enumeration district in Findlay, Ohio. Sometimes district numbers are also included in additional alphabetical suffix. Example, 57-130a, which happened when some districts were split. We'll talk more about this later. Typically, these alphabetical suffixes were not shown on the maps. Also important to note on city maps, the prefix may not be included for each enumeration district. This was done to save both space and time. The prefix will always be included on the first page of the map or as part of the map legend. Additionally, while smaller cities and towns shared the prefix of their home county, larger cities often received a distinct prefix that was different from the surrounding county. Make sure when doing research to record the entire number, including the prefix, as this information is necessary to cross-reference when trying to locate the enumeration district using other census records. Now for some examples of what we just discussed. Chicago is an example of a larger city with a distinct prefix, 103, and with a map that does not show the entire ED number. For example, in the center of the map, the EDs 4924, 4925, and 4927 are visible in orange to the right of the census tract number 36 in the blue circle. But the full ED number would be 103-4924, 103-4925, etc. The 103 prefix can be found near the map legend. The next map shows another location within Cook County, Illinois, the home of Chicago, and this town is called Maywood. Its prefix, clearly written for each district, illustrated on the map, is 16, not 103 like Chicago. This also demonstrates the difference of smaller locations having the whole number written out instead of just the suffix like districts found within much more densely populated areas like Chicago. So why else are census ED maps useful? Besides showing census information, enumeration district maps can also be useful to researchers for other reasons. The maps provide additional context when conducting research, helping to show what an area was like around the time the census was taken. The maps can show locations of houses, businesses, community buildings, points of interest, and the layout of local roads. They can also show landmarks, railroads, and other major features that may no longer exist in a location. Additionally, census ED maps may be the only maps for smaller communities held by the National Archives, so they can provide a great source for local maps from the early to mid 20th century, even when someone is not necessarily interested in the census information that these maps may contain. Here are some additional examples of maps and the types of information that they can show. This map of Kingsford, Michigan shows the prominent Ford manufacturing plant located within the town. Maps sometimes show landmarks including major businesses and manufacturers such as this one. This map also shows the rail lines that lead to that Ford plant. Sometimes with these enumeration district maps, you can get really lucky and a map will list the property or business owners in a particular community. This can be a great resource for genealogy showing who owns specific properties at the time the map was created, such as you can see on this map of Rockford, Ohio. While ED maps can be very helpful to researchers, there are some limitations to be aware of when using them. These maps were used by the Census Bureau, so they may have damage or wear. They may also have condition issues from tape, folds, tears, or other issues that can obscure information. You can see a fold line running down the center of this map of Washington County, Tennessee, possibly obscuring some information. Additionally, base maps may have been out of date. While the Census Bureau attempted to locate more recent maps, typically from the mid to late 1940s for the 1950 census, sometimes the maps that were used were from decades earlier. Maps may have also been planning maps, showing roads or features that were not actually constructed. Be sure to carefully read the source of the map to help determine if this may be the case. Some maps, especially general highway, base maps, or those of more rural areas, do not show individual streets and may provide less details about an area. Maps for cities and towns often provide more information and show more details. However, smaller cities may not have their own map if they had less than five enumeration districts. We will next take a look at some examples. One example of a very old map used by the 1950 census is this 1906 map of Eli, Iowa. It dates from nearly 50 years before the 1950 census. While the boundaries of the community may not have changed during that time, features, roads, and other aspects of the town may have changed. As has also been mentioned, county or other rural maps often lack details. Maps like this one of Monroe County, Michigan may only include township names and boundaries and the locations of towns or villages along with major roads. Most towns and cities within the county were too small to have their own maps. Another limitation to census enumeration district maps is that they do not typically show changes to enumeration districts. Sometimes, once enumerators or supervisors got on the ground to begin their work, they discovered that the planned enumeration districts were too large or contained more people than had been expected. As a result, enumeration districts were split into smaller districts to allow the work to be distributed among more enumerators. This is shown on census records through the addition of an alphabetical suffix, example 261-1A261-1B. This information is not typically shown on enumeration district maps, but is listed in district descriptions, which we will talk about a little later. Fort Worth presents a special case of the splitting of census enumeration district maps. For the 1950 census, the Census Bureau attempted to recruit teachers to serve as enumerators. In Fort Worth, there was very high teacher participation, which allowed for enumeration districts to be split into much smaller pieces and completed in shorter periods of time, given all of this extra help. Again, the maps for Fort Worth, Texas, do not show the smaller districts that were ultimately created. However, the district descriptions do show this, as can be seen by the A, B, and C, written below the enumeration district number on this census enumeration district description. We will now look at how to locate and access census enumeration district maps. ED maps are held by the cartographic branch of the National Archives at College Park, Maryland. The 1940 and 1950 maps are easily accessible through the National Archives catalog. You can search the NAID identifier shown on this slide to locate the series, and use the search within this series blue button indicated by the blue arrow on the slide to narrow results to a specific year and or location. As an example, after clicking search within the series, in the search bar at the top, we've entered 1950 Hancock County, Ohio as our search term and discovered two maps for this location, a city map and accounting map. Click the blue hyperlinks to view these maps. Once you've clicked on the hyperlink, you're taken to the item description for each map. This is the city map for Findlay. The item description lists the year, state, county name, city or town name if there is one, and the enumeration district range in the title. You can zoom in on the map, download using the blue button with the arrow pointing down, or scroll through additional maps if a particular location has more than one sheet. Maps from earlier than 1940 have not been systematically digitized. A few are available in the catalog from 1900 to 1930, but the majority of these maps are not. These maps can be requested and viewed in person in our cartographic research room at College Park. Visit the National Archives website and specifically the Cartographic Branch website for the most up-to-date information about operating hours and status. Before 1950, not all census areas or counties had a map available. The preliminary inventory PI 103, Cartographic Records of the Bureau of the Census, lists coverage for each county by year. And just as a note, very few maps exist prior to 1900. There are just a couple of maps that exist for the 1880 census, and I do not believe we have any for the 1890 census. Additionally, it's important to note that not every map created for the 1950 census has been digitized. Maps showing all census enumeration districts appear in the catalog, but sometimes additional maps for smaller towns were created. Because the information shown on these maps can be obtained from other broader maps, the very specific maps were not scanned. However, they are available to view in person should you wish to see them. For example, for Bronx County, New York, there are seven maps available in the catalog which show all census enumeration districts. But there are an additional 185 maps that are available to view in person, which go into much greater detail. As was mentioned with the case of split enumeration districts, in addition to maps, the Census Bureau also produced written enumeration district descriptions using words to describe the boundaries. District descriptions are also held by the cartographic branch, and for the 1950 census, they will be added to the National Archives catalog soon. The 1940 and some 1930 descriptions are already available in the catalog. This example is from the 1940 census. District descriptions are also available on microfilm at the National Archives. On April 1st, the 1950 census website will officially launch. The website will include search options to locate and view both census enumeration district maps and descriptions without having to go to the National Archives catalog. On March 30th, Michael Knight will be presenting about this website and showing some of the features. Additional information and search tips to help locate enumeration district maps and descriptions are also available through archives.gov. This concludes my presentation about census enumeration district maps. Thank you all for attending and please let me know if you have any questions. Thank you for joining us for today's presentation. We are wrapping up the lecture portion of the broadcast, but we'll continue to take your questions about today's topic in the chat section. Please take a minute to complete our short evaluation form so we can plan future programs based on your feedback. Find the link to it under Show More. If we did not get to your question today, please send us an email. Note that the presentation's video recording and handout will remain available on this YouTube page and our website. If you enjoyed this video, check out our Know Your Records program. We have many more educational videos on how to do research with us. Thank you to the genealogy series team who contributed to the success of this program. We are grateful for your work. Again, please stay if you have questions, although we are concluding the video portion of the broadcast. We will continue to take your questions in chat for another 10 minutes.


Hello and welcome to this session in which we would look at limitations of financial statement analysis. Simply put after we run the financial statements we look at the numbers we are pretty happy with the numbers. Now we need to understand certain shortcomings from those financial statement analysis. So this way if we understand the shortcoming we might be able to understand a little bit more and make certain adjustments for those financial statement analysis. In this session we're going to be looking at some aspect that distort the financial statement analysis such as inventory valuation, depreciation, inflation, and interest expense, fair value accounting, and quality of earnings, and accounting practices. As always when I have a list I'm going to go through each component of this list separately. But before I start I would like to remind you to check out my website farhatlectures.com if you are taking this course, accounting courses, or CPA exam. I don't replace your CPA prep course such as Wiley Gleim, Roger and Becker. I supplement. I'll give you additional material to help you pass the exam. Just visit my website if not for anything is to know how well your university does on the CPA exam. I do have those results. I have many accounting, audit, finance, and tax courses. Please connect with me on LinkedIn. Like my YouTube so you would receive notification about my new videos. Follow me on Instagram and Facebook. So starting with inventory valuation, we have two common used methods to value inventory. We have more than these two but those are common method. We have LIFO which stands for lost and first out and FIFO first and first out. In this session you really have to go back to your basic accounting knowledge but without even remembering that basic accounting knowledge I will try to explain the aspect of this. So bear in mind those are not the only two accounting method. We have the specific identification. We have the weighted average. Although I'm not discussing every single inventory valuation, before I start I would like to let you know that each one of them has a pros and cons. So although I'm only covering FIFO and LIFO bear in mind that the other methods, they also have shortcomings when it comes to financial statement analysis. Okay, so let's simply put if the price of generic goods has been constant say $1, the book value of inventory will be the same whether you're using FIFO, LIFO or any other method. But you know that's not true in the real world. You know in the real world that prices go up and the prices go down. We're going to be illustrating the concept where prices go up because prices usually go up their upward bias but also prices could go down. Whatever I say about prices go up, if prices go down the opposite is 100% true when it comes to inventory valuation. So suppose that the price of generic goods rises by 10 cent per unit during the year as a result of inflation. So you are dealing with units that cost us a dollar and we're dealing with 101 million unit and let's suppose the cost of each of these unit rises by 10 pennies or 10 percent. That's fine. If we are using LIFO, what does LIFO stand for? LIFO stand for last and first out. So let me show you how LIFO work. Let's assume you have, you are buying inventory and your cost is going from two to three to four to five dollars. So your cost is rising two dollars, three dollars, four dollars, five dollars. Now when you make a sale most likely you're going to sell something for seven dollars because if the last time you bought it for five you want to make a profit. If you are using LIFO last and first out what's going to happen is last in was the five dollars. So you're going to match this sale with five dollars. So what's going to happen? Your profit is two dollars. So this is under LIFO. If you are using FIFO you're going to sell the item, you're going to sell the item for seven but if you're using FIFO first and first out what's going to happen is you are going to match the sale with two dollars therefore your profit is five dollars. So notice how your profit is different whether you used FIFO or LIFO, whether you used the last unit you purchased or whether we used the oldest unit which is FIFO first in, first out. The two dollars were first in, they leave the company first, the five dollars are the last items to come in, therefore the first item to leave. So this is the basic idea of FIFO and LIFO. So here what happened is if inflation kicks in and the cost of your inventory went up by 10% the goods remaining are the previously produced at the cost of a dollar. So your old inventory here what happened is because you're using LIFO, what LIFO is going to do when you make a sale, so here's how LIFO works for our specific, for our specific example, when you make a sale you are going to deduct $1.10 as cost, cost of goods sold. What happened is on the balance sheet you are going to have the inventory because you're going to have the old inventory at a dollar because you are selling the new cost, you are getting rid of the new cost. Therefore LIFO accounting would result in cost of goods sold 1.1 million which is higher while the ending inventory will be 1 million. So what happened is your cost is higher, if your cost is higher remember your profit is lower. But your inventory is lower too. So you have old inventory at a dollar which is a million, your cost of goods sold is 1.1 million because you are costing your inventory at the most recent cost. You can see that LIFO accounting accurately measure the cost of goods sold so that's good. The pros of LIFO is your cost of goods sold is a recent figure. However your inventory is old so this is the problem with LIFO. You have a good recent cost of goods sold that's reflecting today's economic conditions. However your inventory is old. Now in contrast if you are using FIFO for this example, if you are using FIFO the opposite will happen. Under FIFO what's going to happen is this, FIFO is first and first out.  The inventory will be the most recent because you're selling the old and keeping the recent. The recent inventory should be valued at 1.1 million. So your inventory is new or recent but your cost of goods sold is old. What happened here you have more profit you're going to show more profit because you are using old cost.  So notice you can't win. You'll either have good cost or bad inventory number or good inventory number and good inventory number and bad cost. The result is that LIFO firm has both a lower reported profit of course because it has a higher cost and a lower balance sheet value. So you have lower profit and lower balance sheet. LIFO result in a more realistic estimate of economics earnings. So your earnings are accurate. Why? Because you are matching your recent sales with your recent cost because you use up prices to evaluate cost of goods sold. However your balance sheet account which is your inventory is distorted because your inventory is lower. So when you compute return on asset your return on asset will be inflated because you are dividing your earnings by a lower inventory figure. So this is the problem with inventory valuation. The second problem we can face but by the way I mean financial analysts are aware of all of this. Therefore what you have to do when you are making financial statement analysis you have to make adjustments. You have for example if you want to use LIFO you have to convert all the numbers for both companies to LIFO or if you're using LIFO you will convert to LIFO. Depreciation is another computation that could distort your financial statement analysis. Let's first start by looking at the economic definition of depreciation. It's the depreciation is the amount of operating cash flow. What cash flow you will need to have that the firm must reinvest. You need to take this cash flow and buy a new asset to sustain your real cash flow at the current level. So basically depreciation from an economic perspective is the use of the cash flow to replace your old asset. This is when they kind of count depreciation. Now accounting depreciation which is totally different. And accounting depreciation we look at the original cost how much we paid for the asset then we allocate this cost over an arbitrary specified life of the asset. So basically if we paid $10,000 for a truck we say we're going this truck is going to last us five years and every year we're going to take $2,000 of depreciation. It's basically the five years and it's arbitrary. I would say well it's going to last us 10 years for that matter. Then my depreciation expense is $1,000. So notice depreciation expense is the actual number that goes on the financial statements. And through the financial statements through net income we compute return on asset return on equity price earnings earnings per share in all these figures. But all these figures are based on numbers that I created in a sense based on the accounting method that I'm using. Assume for example that a firm buys a machine with a useful life of 20 years at a cost of 100,000. Well in its financial statement assuming we're going to be using the straight line method because also we have many methods we can use therefore we'll take 100,000 divided by 20 years and every year we'll take 10,000 of depreciation. Now after 10 years the machine will be fully depreciated and going forward year 11, 12, 13 you are no more you are no more deducting that expense that depreciation expense.  I sorry I apologize I made a mistake. What I was saying earlier the useful life or the economic life is 20 years 20 years but you decided to depreciate it over 10. So you could depreciate it over 20, 10, 15. It's an arbitrary number that you make up when you compute your depreciation. So in computing accounting earnings this firm will overstate depreciation in the first 10 years. So in the first 10 years you are taken 10,000 of expenses. If you want to depreciate it over 20 years you would be taken 5,000 of depreciation then the remaining 10 years you are under reporting your depreciation. Why? Because your depreciation is zero and now your financial statements would look good because you eliminated that depreciation expense. So this will cause reported earnings to be understated compared with economic earnings in the first 10 years and overstated in the last 10 years. Why? Because there's a difference between the way you do depreciation for from an economic perspective compute depreciation versus accounting. Also the way you do depreciation for GAP which is accounting it's different than the IFRS which is for tax purposes that also disturbed the numbers. Also the estimated life of the asset we said here it's 20 years. Why not 25 years? Why not 15? So that number is arbitrary. Arbitrary in a sense that we decide how many years we need to compute. Also we also estimate something called residual value when we compute depreciation. Residual value is how much we're going to be able to sell this asset after we use it. That's also an estimate that could distort depreciation computation. Also we have many depreciation methods. For example here we said this company is using the straight line method. Well there's the straight line method. There is the double declining method. There is the sums of the year's digit. There's 150 double declining balance. Practically for depreciation you could use any method as long as it's reasonable and logical and systematic. GAP doesn't care which method you use. You could make up your own method if you would like to. Straight line is the most common method because it's the most simple method. So another complication arise from depreciation when we introduce inflation. Now remember when we depreciate an asset conventional depreciation is based on historical cost. So we're saying we said we paid 100,000 for this asset. But the current replacement cost of the asset is different. The current replacement cost five years later could be 125,000. What you do is you keep depreciating the asset using the 100,000. And the reason why depreciation is higher because of inflation supposed to be higher because the cost of this asset went up because of depreciation. So here what's happening because of depreciation because of inflation. So inflation is distorting the depreciation figure. So that's a problem that could distort the financial statements. Now from a firm's perspective that's good. Why? Because you don't want to book more depreciation expense. More expense means less earnings because if you want to do that. Inflation and interest expense play a role also in distorting figures. While inflation can distort, can cause distortion in inventory and depreciation cost which we just saw this, it perhaps can even have a greater effect on the interest expense. So you have to compute your interest expense. Remember the nominal interest expense. Remember the nominal is composed of the inflation plus the real. So the nominal equal to the inflation that compensate the lender for inflation induced erosion in real value. So what we have to know is how much is inflationary that we're paying and how much is real. So from the perspective of both lender and borrower, part of what's conventionally measured as interest expense should be treated more properly as repayment of principle. Because the interest expense should only be the real interest expense. Inflation is not an expense. You are paying extra as interest is because you have to compensate for inflation. But that's not really an expense. That's not really an expense. So simply put, let's work an example to see how it works. It is an expense but it should not be an expense. That's the point that they're trying to make. Suppose generic product has outstanding debt with a face value of 10 million and interest rate of 10%. What does that mean? It means every year they pay an interest. Interest expense is 1 million. 10 million times 10%. Let's assume inflation during the year is 6%. If inflation, if the nominal rate is 6, 6 of it is inflation. 6% is inflation and 4% only real. So your real interest rate is only approximately 4%. What does that mean? It means the 600,000 of what appears as interest expense on the income statement, which you do, is really an inflation premium or compensation for the anticipated reduction in the real value of 10 million principle. So the reason they want you to pay extra, it's not because it's an actual expense. It's because they want to protect, the lender want to protect themselves from the erosion of inflation. So only the true expense, the true economic, in quote, expense is only 400,000. Now the good thing in the US, we practically have no inflation, so we don't have to worry about this. So the 600,000 reduction in the purchasing power of the outstanding principle may be thought of as repayment of the principle rather than an interest expense. So really that 600,000 should be a reduction in the principle. That's not really true. You know, companies would love to do this, but that's not how it works. So the real income of the firm, what's happening to the real income of the firm is being understated because of inflation by 600,000 and extra inflation money you are paying to your lender. Otherwise you should be only paying them 400,000. Let's take a look at this example to see kind of make this, make sure we understand all of this. In a period of rapid inflation, it means prices are going up. Companies ABC and XYZ have the same reported earnings. They both have the same reported earnings. That's fine. ABC uses LIFO inventory accounting and XYZ uses FIFO. ABC has relatively fewer depreciable asset and has more debt than XYZ. Okay, so what happened to ABC? So ABC, let's see, ABC, XYZ. Let's start with inventory. From an inventory perspective, ABC uses LIFO. Just give me one second. Let me write inventory here. Inventory. So what happened to the earnings of ABC? If they're using LIFO last and first out and prices are going up, their profit will go down. Their profit will go down. Why? Because they are matching the most recent sale with the most recent cost and the most recent cost is higher than the old cost. Now for XYZ, the profit will be higher. The profit will be higher. Why? Because they're using FIFO. They are matching recent sales with old cost. Okay, now from a depreciation perspective, ABC have LIFO has fewer depreciation. Well, if they have fewer depreciation, they're not really taking advantage of the inflation because if you have more assets, that's really good. So they take less advantage from the depreciation. Why? Because they don't have a lot of assets. If they have a lot of assets, their depreciation expense will be lower relative to the inflationary environment. Here, if they have more, then they will take more advantage of depreciation. And the third aspect is that the ABC has, I believe ABC have more that, ABC have uses LIFO, has a relative fewer depreciation, and it has more that. If they have more that, they have to pay higher interest because with inflation comes higher nominal rate. Here, they pay lower because they have less that. Overall, they have lower interest expense. So what's happening here, this environment is hurting ABC. Okay, ABC, so relatively speaking, ABC is better than XYZ because they're taking hits on their profit from their accounting method. They're taking hit on the depreciation because XYZ is taking more advantage of the depreciation, but also here because they have more expenses, they have lower profit. Okay, because at least they have more assets, more, we're assuming they have more, more physical assets to be depreciated, but definitely from the debt, they have more expenses than XYZ. So ABC is being, from a profit perspective, they're more profitable, in my opinion, than XYZ, in real profit than XYZ because if they have both the same reported earnings, in reality, if ABC switches their accounting method to LIFO and they have less interest, then they will be more profitable. Fair value accounting, what's fair value accounting? Fair value means report, things at fair value, report things on the balance sheet, how much they are today. So the many major assets and liabilities are not traded in financial market and they don't have easily observable, observable value. When we talk about fair value accounting, simply put, GAP allows you to report things at fair value, things specifically financial assets and financial liabilities. Why? Because those assets and liabilities like stocks and bonds, they have an active market. Okay, but many assets and liabilities that you have, they don't have an active market. For example, we can simply look up the value of the employee stock options, healthcare benefit for our retired employee or building another real state. So those are not reported at fair value. Okay, while the true financial status of the firm may depend critically on these values, which can swing widely over time, common practice has been to simply report them at cost. So this is another problem with financial statement analysis. When we are looking at the balance sheet, most of the balance sheet figures are not fair value. Those figures, they could be old, two years, three, five, or for example, if you purchased a building 10 years ago, the building will have a different fair value today. But when you are running those ROEs and ROAs and ROI, they're all based on old figures. So proponent of fair value accounting, also known as mark to market, argued that financial statements would give a truer picture of the firm if they have, if they have better reflected the current market value of all assets and liabilities. Those are the proponent. Now, what would the opposite party said? The opposite party would said, look, if you're going to report things at fair value, you're going to have to do a lot of estimates. And once you make estimates, you are subject to bias, then you can actually manipulate the numbers figures and trying to, you're trying to kind of make the picture better. You'll even make it worse than it should be. So let's take a look at fair value accounting, FASB statement 157 discusses fair value and places assets in three different buckets. So when you are determining the fair value of an asset, we have three different buckets or three different level. Level one is the kind of the best level. Level one assets are traded in active market and therefore should be valued at their market price. So what is level one? Let's assume you have stocks and bonds that are traded in the open market, like Apple, Microsoft, Walmart. That's easy. You have level one data. Therefore, you have the best, you have the best fair value. Therefore, you can mark your assets, financial assets and financial liabilities to market. Level two assets that are not actively traded. Here, you are looking at assets. You cannot loop them up on the internet or in the Wall Street Journal, but their value may be still estimated, use it observable market data on similar assets. For example, if you have a building in a certain city and you want to value it, well, well, if a similar building in that city was sold, that building is comparable, then you would say the fair value of my building should be the same as that building because it was sold recently. What I'm looking at is now is I'm using comparable data. I'm using some observable market on similar comparable asset. These assets can be marked to a matrix of comparable securities. Or if you were talking about securities, you'd say my security is similar to that other security that's traded on the market. Therefore, the value of my securities should be that much. Level three is the most complicated one and it's the hardest to value. Here, you don't have any active market. You don't have any similar assets. It's difficult to identify other assets that are similar enough to serve as a benchmark for their market value. One has to resort to pricing model to estimate their intrinsic value. And we learn about intrinsic value. Basically, we can estimate the cash flow, discount the cash flow, so on and so forth. So rather than mark to market, these values are often called mark to model, which is basically you are using a model, although they are also disproportionately known as mark to make believe. Simply put, when you do a model, basically you're taking cash flow and you're discounting the cash flow based on certain interest rate. So you are doing two estimates.  As these estimates are prone to manipulation by creative use of model imports, of course they are. But since 2012, firms had been required to disclose more about methods and assumption. So if you're using level three, you are using level three, you have to explain clearly how you came up with these figures. So now anyone can see how you are coming up with these figures and to describe sensitivity to their valuation estimate. So you would say this is my figure, but let's assume I am wrong by 10%. Here's what the figure would be. Or if I am conservative, you don't have to say if you're conservative, but if you are wrong, you want to say like, what's the worst case scenario? For quality of earnings and accounting practices, I will have a separate recording because this session has many subtopics and I believe it deserves a session by itself. As always, I'm going to ask you to like this recording, share it and please visit my website, farhatlectures.com. If not for anything, is to find out what your university scored on the CPA exam. As always, if you're studying for your CPA exam, don't shortchange yourself. My supplemental material will not replace yours, it will be in addition to yours and will be an excellent edition. Good luck, stay safe and study hard.


J-E-L-L-O. The Jell-O program, starring Jack Benny with Mary Livingston, Phil Harris, Kenny Baker, and yours truly, Don Wilson. The orchestra opens a program with Sing My Heart. Ladies and gentlemen, there are certain words which seem to have a fine, dependable sound. And I think the word genuine is one of them. The dictionary says genuine, real, true, pure. Having the character it is claimed to have as a genuine signature. Well, Jell-O measures up to every one of these claims, and the name Jell-O is a genuine signature. For that name is a trademark. It's the property of general foods. And it tells you here is the real thing. If you hear any other gelatin dessert called Jell-O, that's incorrect, for there is no other Jell-O. So whenever you order Jell-O, always order it by name, whether it's from your grocer or in a restaurant. And this is National Restaurant Week, the week of May 8th to May 14th. So when you're dining out, order Jell-O for dessert. Just remember to enjoy Jell-O's delicious, extra-rich flavor, as tempting as the real fruit. Be sure to insist by name on genuine Jell-O. Now, ladies and gentlemen, that spring is here and well underway. Tonight, we bring you a big dose of sulfur and molasses, Jack Benny. Thank you. Jell-O again, this is tough to take Benny coming to you. So hold your nose, folks, and swallow hard. Ain't I awful? You know, Don, we can laugh now about sulfur and molasses, but when I was a kid, I hated that stuff, didn't you? I sure did. Gee, I remember every time my mother gave it to me, I used to go, uhg. Uhg? Yeah, oh, sometimes I'd go ish. But as a rule, I'd stick to uhg. It was a colloquial expression in Warkeegan. Well, tell me, Jack, did you say, uhg for cod liver oil, too? Ugg for cod liver oil, heavens know, Don. For cod liver oil, the correct ejaculation is brrrr-nagasaki. I, uh, I remember that distinctly. Well, that's about the silliest routine I've ever heard. I'm getting out of here before the wagon pulls up. Well, you're a fine one to criticize, Mr. Harris, with that baby talk of yours. What baby talk? I heard you on the air last night singing the Three Little Fishes. Talks to the mama-fitty top if you tan, and he fam, and he fam wide over the dam. Woo! Now, wait a minute. You should have heard them, folks. Boop-boop-did-em-dot-em-wottem.   Well, why shouldn't I? It's a very popular song, and it's sweeping the country. It is, eh? Yes, and I did watts and watts of wetwest to tink it. Oh, who do? Well, listen, Phil, don't tink it in here if you want to keep your job. I'm getting tick and tired of you towing off all the time. Well, I don't care about my job here anyway. I'm in pictures now and doing swell. And if you want to know something, I'm even trying to get rid of my orchestra.  Well, Phil, for your information, there's an old Chinese proverb that says, do not dump orchestra in ash can until you are out of sane. I found that in a rice cookie.  Oh, tut it out. Tut it out. Tut it out yourself, and tut up. Oh, hello, Mary. Hello, kitties. Can an adult get in this conversation? I think so. Say, Mary, is you over here, Phil, do that baby song, Three Iddy Fishies? Sure, I was over at the Wilshire Bowl the other night and saw him do it. Everybody stopped dancing to watch him. Got plenty of laughs, didn't I, Mary? Who wouldn't with those diapers you were wearing? Oh, dressing for the party. Yeah, and you want to know something, Jack? What? Our maestro is knock-kneed. Knock-kneed? Hey, I didn't know that. Oh, she's ribboned, Jack. I ain't knock-kneed.  Oh, that's a good one. So the big movie star has knocked me. That's rich. Quiet, hooplegs. Mary, we were discussing Phil. Anyway, we've got a long play to do tonight, so let's all settle down and get started. Where's Kenny? Kenny, I saw him across the street in the sandwich shop. Oh. You should have seen him flirting, Jack. You know, they've got a new waitress over there. They have? Phil, come back here. I never saw such a guy. Well, I'm hungry. If you're hungry, take a sandwich out of my bucket. It's under the piano right next to my police dog. Oh, Jack, why do you have to bring that dog down here? Nobody's going to steal your lunch. Oh, no. Take a good look at those drooling, dipsy doodlers sitting there. I need that dog all right. Say, Jack, why do you always bring your lunch to the studio anyway? 18 years ago, he lost a hat in a restaurant. Mary, I've been trying to forget that. So please. Quiet, Baskerville. Say, Mary, what were you saying before about Kenny? Well, he was in the sandwich shop trying to date up that new waitress. He had three molded milks, two ice cream sodas, and a banana split before he got her first name. Oh, goodness. How could he eat all that stuff? With a spoon. That's a good one. Oh, my goodness. I'm going home. That's all. I'm going home. Come on, Baskerville. What's the matter, Jack? I thought that was pretty quick thinking. Listen, Ezra, I want you to cut out those ad-libs. You've started more bridge games in the middle of our program than anybody on it. You know what kills me, Don? I work and slave over a script all week long. And then on Sunday, the Maharaja walks in, and with three little words puts us right back on the Chautauqua circuit with a spoon. Well, it just came to me and I said it. And you know, folks, this just came to me. Oh, fine. As long as you have a spoon, you can get a dish, fill it with jello, and you'll have the most tempting gelatin dessert you've ever tasted in your life. Now, at least, Don, you're sophisticated. It is economical, easy to make, and comes in six delicious flavors. Strawberry, raspberry, cherry, orange, lemon, and lime. Look for the big red letters on the box. Well, I don't know where we are now, so we might as well have a number. Play something, Phil. Hold it a minute. Come in. Mr. Benny? Yes? Is Phil Harris going to sing three little fishes tonight? No, and who are you? Just a hungry college boy. Goodbye. I wonder if the CCC boys could plant something on his head. Play, Phil. Those of the Rio Grande played by Phil Harris and his miracle-mile music manglers. And just to be fair about it, I must admit that that number was very good. It was swell. I didn't think it was loud enough. Not loud enough? Why, Phil, you've got three violins in your orchestra, which I know will be startling news to our listening audience. They're plenty loud. Not for me. I got to put more brass in my band. More brass? Phil, you've got a trumpet player alone that Gabriel will have a tough time following.  Just leave well enough alone, Phil. And now, folks. Just the same, I need more sock to my music, more volume. Why don't you put in a burglar alarm? That's all he needs. And now, folks. My band may sound all right to you, Jack, but as far as I'm concerned, I don't hear enough brass. Phil, just pin your curls up over your ears and everything will be ducky. Now, let's get on with our show. Hey, Jack, look who just came in. Oh, yes, our sandwich shop, Casanova. Hello, Kenny. Hello, Jack. Boy, am I sick. Well, you should be sick. After three malted milks, two ice cream sodas, and a banana split. All of that just to talk to a girl. I'm going out with her tonight if I feel better.  Yeah, I got her phone number right here in this card. Gee, she's beautiful. Give me that number, Kenny.  Come on, give it to me. I won't. You give me that, or I'll tell your mother. All right. Here, you stool pigeon. It's more like it.  Mary, I only took that phone number away from Kenny because he's too young to be going out with girls. Well, you're too old, so give it a fill. Oh, no. Come on, Jackson, make way for tomorrow. Phil, you're not getting her number, and neither is Kenny.  What is this, a grab bag? Now, nobody's getting this girl's number, so forget it. Looks like she's stuck with foxy grandpa. Mary, I'm merely holding her phone number because Kenny is too young. Let's see this. Oxford, 7, 3. Kenny, is this a 3 or a 5? I'll tell you when I grow up. Here, you can have it back. I was only kidding. Say, Kenny, old pal, I got an idea. Why don't you bring your girlfriend over to the Wilshire Bowl tonight? I'll let you lead my band. You better hang your girl in the check room, Kenny. You said it, Mary. And how? You know, Jack, the last time I brought a girl over to Phil's place, Phil came home with us in a cab. Well, I bet you were plenty burned up, weren't you? I'll say I had to sit up front with a driver where I couldn't hear the radio. Oh, so Phil got your girl, eh? Yeah. Well, Kenny, for your edification, there's an old Chinese proverb that says, he who introduces girlfriend to Phil Harris had better carry spare. And now, kitties, let's forget our love life and get on with the program. Ladies and gentlemen, as you all know, yesterday marked another running of that great annual turf classic, the Kentucky Derby. So for our play tonight, we are going to- By the way, Jack, did you place a bet on the big race yesterday? Yes, Don. I had $2 on the winner, Johnstown. I had a terrific hunch on him. That's Jack all right. He throws away his money like a boomerang. Now, Mary, that horse wasn't so sure of winning. You didn't play him to win. Oh, that's right. I had him to show. And now, getting back to our play, as I was saying, folks, yesterday was the running of the great Kentucky Derby. So tonight, the Benny Perry Mutual players will present an original play dedicated to this outstanding event. This will go on. Hey, is this a general program? What? Why, Andy Devine, the old mayor of Van Nys himself, come on in. Hiya, Buck. I haven't seen him in a long time. Andy, gee, I haven't seen you in weeks. Why don't you drop around once in a while? Well, I've been pretty busy on the farm, Buck. You know, it's spring, and I've been doing all the planting and plowing, and it's a lot of work for one man. I'll bet it is. Hey, well, doesn't your paw do anything on the farm? No, Buck, he's got a system. Oh. He makes cider in the fall, bottles it in the winter, drinks it in the spring, and sleeps all summer. Well, at least he's happy.  Oh, I don't trust him, Buck. Last year, he took a couple of snorts and plowed up Highway 99. Oh, well, I'm glad you found time to come down to see us. Hey, Andy, how's your maw? Oh, she's fine, Buck. Paw took her up to the San Francisco Fair last week. Well, that was nice. He tried to get her a job with Sally Rand, but they turned her down. They turned her down? Why? She's got your trouble, Buck, bow legs. Now, wait a minute. The next one on this program that says I've got bow legs has got to chase a pig through them. It's a cinch. Never mind. Say, Andy, how do you happen to be in town today? Oh, I come down to pick up my girl. She just got a job across the street in that Sandwich Shop. In the Sandwich Shop? Jeepers, creepers, I'm cooked. Serves you right, Kenny. Say, Andy, I don't suppose I ought to tell you this, but Kenny happens to have your girl's phone number. Let it ring, Buck. I'll answer it. You're pretty sharp. Well, now that you're here, Andy, I hope you can stick around because tonight we're doing a play about the Kentucky Derby. And I think we can find a spot in it for you. What do you say? OK, Buck, I hope I'm a jockey. We'll see, Andy. And now, folks, Kenny Baker, our young tenor will sing. What are you going to sing, Kenny? Penny Serenade. It's a request. Oh, who requested it? Andy's girl, so I'm just going to sing it mediocre.   You're right, Jack. I'll sing like I've never sung before. The show must go on. What a clock. You said it. Sing, Pagliacci. Hear my love song for a penny. C, C, C. Just a penny, Serenade. Once I strayed the window of a lovely lull, I softly played my penny, Serenade. On the tender dawn of love and sweet serenade. As for me, in my heart I played a lover, Serenade. You can hear it for a penny. Just a penny, Serenade. C, C. Hear my love song for a penny. C, C, C. Just a penny, Serenade. So divine, she was mine. No word had been spoken. When I walked from my dream, she was gone. My poor heart was broken. That wherever she may be, she will be Serenade. By Kenny Baker. And now, ladies and gentlemen, without further ado, we will bring you our tribute to the Kentucky Derby by presenting a little play in two scenes and three furlongs entitled, Weather Clear, Track Fast, Fine Play, Bumcast. Now, in this turf drama, we will all play the parts of horses.  Pardon me. This is silly. I'm not going to be a horse. Kenny, if I can get down on my hands and knees, you can. Only he can get up. I can get up too, so don't be so smart. Well, that's settled. We're all going to be horses. I'd like to see somebody put a saddle on me. Quiet, El Chico. And pin on your tail. I want this to be realistic. Now, before presenting this play, folks, I would like to announce that any resemblance to horses, living dead or under General Sherman, is purely coincidental. The opening scene is the paddock at Churchill Downs, 20 minutes before the Big Rays, where we find El Chico, Johnstown, Technician, Shalladon, Heatherbroom, On Location, and all the other entries, True and the Fat. Curtain, Music. We're horses now, folks. Oh, Shalladon, Shalladon. Yes, Technician. You better lay off those oats. No, you've been putting on a lot of weight. Oh, I'm not so heavy. You're not. You're the only horse in this stable with a double chin, and you know it. Say, Shalladon, look at El Chico over there with that curly mane of his. That's a finger wave if I ever saw one. What are you eating, El Chico? Corn. I thought so. I suppose you think you're going to win today. Why, pal, my tail will be in your face all around that track. Oh, it will, eh? Yeah. Listen, El Chico, if your tail comes anywhere near my mouth, I'll bob it. So watch out. Oh, hello, Heatherbroom. What are you reading? A letter from my brother. He's with Borden's dairy now. Oh. Isn't he pulling that ice wagon anymore? No, he got cold feet. I see. See, I hope I don't wind up on a wilt wagon. I hate those early hours. Well, Heatherbroom, good luck to you today. Hey, Heather, what are you doing after the race tonight? Oh, nothing. Let's go over to the Blue Moon Library Stable. They have a marvelous floor show. They have? Who's playing there? Thinks mules. Oh, they're wonderful. There's a little brunette on the end. Well. How about going there with me tonight, Heather? It's a date. I've got a beautiful new blanket I'm going to wear. It's from Saks Bay Metals. Now, wait a minute, El Chico. Heather has a date with me tonight. And I'm going to pick her up at 8 o'clock. 8 o'clock? You won't be coming into the stretch till 10. I won't, eh? They clocked me this morning, brother. And I heard my trainer say, if I get on the rail at the first turn, I'll jive right in. So there. Hey, fellas, there's Johnston over there. Gee, he's well-headed.  Look at him getting a hoof a cure. Who does he think he is, anyway? Well, here comes on location. Oh, yeah. Hiya, fellas. Hello, Juan. You think you've got a chance today? I will if it's a wet track. You know, I'm a terrific mutter. You should be. You don't know enough to come in out of the rain. Now, Heather. Well, I'm 40 to 1 today, Smarty. Well, that's nothing to brag about. It ain't, huh? I'd be 60 to 1 if people knew I had that banana split. I wouldn't be surprised. Shalladon, I told you to lay off those oats. Well, I'm starved. I know, but passing you on the track now is practically a detour. My goodness. Bzz, bzz, bzz. Darn these flies. Get away from me, old horse fly. I want shalladon. There's meat on him. Scat. Shoot. Well, fellas, we still got a few minutes to kill before the race. What do we do? How about pitching a game of horseshoes? Oh, I don't want to take them off just for that. Say, who's that new white horse in the stall across the way? They just unloaded him this morning. Haven't you heard? That's Abduld, a third, an Arabian horse. Oh, an Arabian, eh? I must get acquainted. Hello, Abduld. Hello, Stranger. My name is Technician. Where are you from?  Are you alluding to me? Yes, where are you from? I'm out of gefilte, girl, by Bagelboy. Oh, yes, I read about your family and the breeder's digest. You come from very good stock. Well, certainly. You ain't talking to a plug, you know. Well, I appreciate that. By the way, Abduld, why aren't you in the big race today? I should get high blood pressure for a bag of oats. Oh, come on, running the race. No, not me, partner.  I can't help it. I got mule blood in me. Well, you'd never know it. Hey, that's for us, fellas. We better get going. So long, Abduld. Good luck, Technician. Gee, I'm nervous. I'm down, and I can't find my blinkers. Guys, my mane looks beautiful.  El Chico, put down that mirror.   Oh, come on, tails up, everybody. We're off to the race. Gee, hey, look at that crowd. We're sure packing them in today, huh? Well, folks, here come the horses up to the barrier, ready for the big race. Oh, it's a lovely day here at Churchill Downs. I wish you could see these beautiful banged tails prancing up to the post. Bang tails, I hate that word. They're lining up, folks. There's Johnstown, the favorite. Shalladon, Heatherbroom, El Chico, and On Location. Didn't even mention me. Hey, move over, El Chico. You want the whole track? Quiet, you old gray mare. I'm not a mare.  That's where the fly bit me. There's a little trouble down there, folks. Technician is glaring at El Chico. You're darn right I am.  Seems to be quite temperamental. What's the matter with you, Heather? Stop fidgeting. Well, my girdle's too tight. That's a saddle. How are you going to run in those high-heeled shoes? Who's your blacksmith, anyway? I'm Miller. Oh. I know him. He used to shoe my mother when she ran at Saratoga. The horses are calming down now. They're all lined up. They're all except one who's facing the wrong way. That's me, folks. Wouldn't you know it? Yes, turn around. On Location is back in line now, and it looks like we're going to have. They broke clean and fast, and Johnstown takes the lead, followed closely by El Chico. TM Dorset is third, then comes Heatherbroom, this county on Location, and Shalladon. Hey, what am I, an orphan? And oh, yes, there's Technician, puffing hard. I am not. Oh, folks, what a race. Johnstown is still in the lead by two lengths. El Chico second, Heatherbroom third, and Technician is doing the best he can with those faux legs. I'd like to kick him right in the face. They're rounding the far turn now, folks. And coming into the stretch, Johnstown is leading by three miles. Don't exaggerate. Shalladon and Heatherbroom are moving up. Looks like they're going to finish in the money. I'm going to finish in the money, too. You wouldn't if you ever spent any. Oh, yeah? Wow, look at Johnstown run. He's still way in the lead. And look, folks, here comes Malicious on the outside. Malicious? He isn't even running. Quiet. They're nearing the finish line, folks. Here they come, they're crossing the wire. Six lengths. Shalladon second by a length and a half. Location last by courtesy of Mervyn Leroy. Gee, I'm all in. And here's the winner, Johnstown, coming up to the microphone. Say something, Johnstown. Put the oats on, Mal. El Chico.  It's very inexpensive, and it's quick and easy to make.  Yes, ma'am, it is a picture. And just as good to eat as it looks. For jello chocolate pudding brings you that old-fashioned homemade goodness. It has a perfect texture, a rich, tempting color, and it's as easy as can be to make. All three new jello puddings are simple to prepare. The directions are in every package, and they cook in next to no time. And all three taste grand. Jello butterscotch pudding, rich with true butterscotch flavor. Jello vanilla pudding, delicate and creamy and tempting. Buy three packages at a time. Ask your grocer tomorrow for jello chocolate, butterscotch, and vanilla pudding, the real homemade kind. This is the last number of the 30-second program in the new Jello series. And we will be with you again next Sunday night at the same time when we will present our version of Pandro S. Berman's great RKO production, Gungadine. Don't miss it, folks. India, elephants, camels, soldiers, drums, bugles, and I will be Gungadine. You got nice legs for it. Quiet. Good night, folks. Eat, count, count, all. Kenny Baker appears on the Jello program to courtesy of Bermeloy Productions. The selections sing my heart is from Love Affair. This is the national broadcasting company.


Today we are on site at Tribal All Day Cafe in the heart of Bishop Arts, Dallas, Texas. Tribal is a Chickasaw Nation-owned and operated restaurant. I'm actually gonna give them five out of five stars. I highly recommend this cafe, truly great vibes.


Hey everybody it's Sam from Big Stuff Crowd thank you for watching my tutorial today this is the last of my Mother's Day projects for this year's series I hope you've enjoyed it and I will share or have been sharing the last year's series at the end of each of these videos and I'll also share that playlist on my blog along with the playlist of all of these projects as well so that's 10 projects in total so plenty to give you inspiration but I thought I'd finish with this lovely basket and I thought with Easter coming up as well it would work really well for Easter as well as Mother's Day so the one that I'm going to be showing you is all going to be yellow but basically this is from two pieces of 12 by 12 paper or cardboard strong paper or card is what you'll need really this is double-sided as well this is using the Wonderlust from First Edition and then I've just kind of pulled out the dark navy there in the ribbon just to decorate it and it's really big and I thought this one would be lovely for flowers so you could buy a little pot a pot of flowers or I know a small bouquet in a vase and it would be lovely decorated I can't really put it on its side because I don't want it off the tour obviously all come out everywhere but that's just an example that's quite small oh just pulled it off the top there let me uh I'll have to find that in a minute you know in there those little fake flowers I pulled it off anyway right so that is that one so that's two pieces of 12 by 12 so it's a huge basket um or gift bag so it'd be great as well you could put tissue paper over the top this one is using two pieces of eight by eight no I think it was just under eight by eight because I had to divide it by three but again I'll share all the measurements for each sizes but that one there you can see you know against my hand there the size of that one and then this one is a dinky one and this is using two pieces of six by six so again with my hand there you kind of get an idea and I just think they're adorable I think they're so cute and like I said they work lovely for Mother's Day but also for Easter because you could put lots of little Easter and mini eggs in there and put some tissue paper over the top and it just looks lovely so let me just stack them all inside each other pop them to one side and again they work great for birthday um you have a birthday theme on them obviously their Mother's Day or Easter at the moment but in even Christmas would be great as well so I've got my mobile there get rid of that okay so you'll need two pieces of 12 by 12 so I've got this lovely spring colour and this again is from that Wanderlust first edition paper pack which I'll share all the links to and then on the other side it's got this pretty pattern as well you do want a pattern that is kind of you know uh doesn't matter which way up it needs to be because it's going to be wrapped around so this is one I've already done to give you an idea so it wrapped right the way around so it doesn't matter you know which way you look at it so bear that in mind when you're choosing your print it's just some simple score lines so you're just going to score a long 12 inch side at four and eight and then pop it onto the next side and again score it four and eight so you should now have three six nine big four by four squares okay so that's all the scoring you need to do that on both pieces of the 12 by 12 that you have and then what you want to do is if I just burnish it all first because it'd be much much easier for you to see the lines and what I'm doing so now you can see all those squares that I've got here okay you got your top three squares the middle square with your ruler you want to line it up along the top and you'll see it's four inches you just want to put a little notch or a little pencil mark at two inches just along that middle four by four square just the top of it just mark at two inches and again on the very opposite one at the bottom here so this middle square along the bottom you again want to put a little notch or pencil mark at two inches so the it's the exact middle of the whole sheet of paper so if you're doing it with your whole 12 inch ruler or 30 centimeters then it will be six inches okay then what you want to do is from so this is if I just fold it over like so so this is this square from the bottom corner of it you're going to score up to that notch I'm doing it lightly because I don't want to go all the way through onto the other side and then again on that side just score down to the corner of that square so if I just open it up now I can do that properly so the bottom I'm just scoring make sure you've got a soft surface something that will allow you to put lots of pressure on it and again pop my stylus down make sure you get a really nice point you want to make sure you do get the perfect join because this is going to form this really nice effect you can't see it as much on that one but if I show you on the back of this one maybe even with that one you can see there you get this really nice triangle and that's you know if you're slightly off with that piece then you would notice it so that's that one and then I'll just do the same with this one okay so now what you want to do is flip it over and when you've got that score line where you've just done that triangle you just want to burnish it so and again just folding it over so now that's what I've got there I've just burnished that triangle so again do this side here turn it over and fold it up it's much much easier to do it that way so and here you can check you can see there that's a perfect triangle I've got a nice point and again with that in there okay so you want to do that on both pieces you should have two pieces like this okay so I've got this piece here now I just went ahead and put some glue on that and then realized actually you've got to do a little bit of cutting first so I'm going to do it on this side and not the side of the glue when you fold this piece over it will the top piece here actually I'm going to do it this end just because that glue is drying before I sit it so when you fold this one right over you can't fold this side over on top of it and that's because the top of this goes over this score line here so what we need to do is trim it off so I'm going to do it first you can see what I'm doing and then I'll explain it to you because it can be a little bit tricky so the whole thing's going to come down like so all right because this is going to be if I bring it up like that that's one half and then these are going to come together and form that basket so once you put that one down and then that one over the top it goes over that other score line which forms this triangle outside here so we need to trim that piece off so what I'm doing it's a bit hard to kind of show you but pinching those two bits together okay so again fold it over and just pinch those two bits between my finger and my thumb that's what you want to cut and I'm just going to cut down see what I've cut off there so I've created that shape it's like a diamond kind of side of a diamond and it forms yeah it's really hard to kind of explain it but it's the easiest way to do it so then because basically now this piece here is going to then fold down and over like so so that piece we've just cut away this next piece goes on top and then that's what gives you that side of your basket and this triangle like pocket on the front okay so again I'm just going to go through that so that's the two triangles that we've scored and we've just burnished that one fold over and this one comes down and then you want to cut let me just just go into put underneath here a piece of card so you can see that shape so that's the angle I went down and cut okay bring this all up here so you can see that other school line of the triangle and where that lies it needs to lie to what's it my right hand side of that piece so that it can fold over and just close like so I'm going to repeat it and show you again on that side there I'm sorry if I've rambled on a bit there but I just want to make sure that I'm trying you know getting it across as well as I can so you just want to add some glue now onto this triangle here where we cut and then fold it in and stick it down use your bone tool and just make sure that glue spread out like so then you're going to put some glue on here you don't want to smother it in glue make sure you go to the edges but you just want to make sure there's enough to cover it and then fold that all down and just spread out all of that glue like so then with this other triangle piece here probably doesn't help that this paper's pattern so apologies it's sometimes when you make all these things and I really want to use this print but it doesn't always video well so and that I am trying and that piece you're going to fold over with all that glue on it and again just using my bone tool just to make sure I get that glue right into all the corners like so and then I want to put glue on this side and again just spread all that glue out and now that will give you this lovely shape on the front okay so now this side again so this is back to where we were so that piece and this piece that piece goes in this piece comes down on top that's what you want to cut is these two pieces together but the problem is you've got to get your scissors right up to the the edges there where you've burnished so that one you're lying on top and you can see that and then cutting down like so it doesn't really as long as you cut enough so it's past that piece there that's bent okay so just use your judgment and again I'm going to so it's it is really easy to do it's just hard to explain and again with this pattern paper probably not the best but never mind so again just stuck that one and then I'm putting glue on this top one hold it down because this is now coming down over what I'm doing I'm not going to be able to see which again apologies okay and then you've got this last one here so you're going to put glue on this inside here just again on that triangle hold it over and then on this piece here this bit of the triangle put some more glue I found this all by pure accident again I just sit around with my scoreboard and scrap copy paper and I just play around with score lines so that's how this one comes about and sometimes you have to just take little extras off to get it all to kind of sit where you want it so I think I've got there though hopefully you've all understood what I'm doing so now you have this really large basket now this would work lovely just on its own you could put some card now going right the way around to this side and you'd have a lovely little basket and you could fold down these pieces as well put a nice bow there there you go so there is something just for the 12 by 12 I like to just go that little bit further so now what we're going to be doing is popping this one inside the other now what I want is I need to cut these pieces out because I want to when you put it just like that you lose that lovely triangle effect even if you put that one you put that one on top you you don't get to see triangle you just need to remove some of it so I'm going to grab you know I'm going to use my biggest scissors okay and then what you want to do is from this corner here I'm just going to pop your scissors right up until that corner you can kind of if you say I'm bending it a little bit there and just cut nice and neat right the way up to that bit there where they all meet in the middle like so and again do that on this side so right down the corner there and then all the way up you're only doing this on one so choose whichever one now that piece where you've not cut it will sit inside and it will all connect perfectly and now you will have one two three triangles on the bottom and then this here okay now what you want to do is glue all of this all of the bottom and all of the back don't go over onto this triangle just glue up to there okay okay so I just smothered that in glue I'm using the um tacky glue the Alina's tacky glue which me and my mum both have the same and it's brilliant because it dries super hard so now you just want to carefully pop the big square on the bottom so it lines perfectly up with the other square then pop it on its side and just kind of move it until you get that all nicely lined up there then pop it on the other side and again just make sure that all sits in there nicely like so there are a lot of like I guess it's quite an angled project this one there's lots of different edges and stuff to it sometimes we've got to do these things if we want to create these shapes and styles so I do try and mix things up as you know and bring you really unusual bits and pieces sometimes to get those you've got to go out go out of your comfort zone a little bit so just making sure now get your bone tool in there get that all get right up into all those kind of corners that's where that's really stuck down okay so there we have this really lovely shape and it's just gorgeous now again there's other kind of variations with this you could keep this like this now and just stick some glue to these pieces that are still loose this one's not so loose it's obviously a little bit bigger so you could just stick those down and you could put a piece of ribbon or something to attach it there like so or just continue with some more card and do a handle or some ribbon and just have a really kind of um what's not I don't know what shape this is actually one two three four five six sides is hexagon so it's not quite sick I don't know how it would be anyway I think of that but you know what I mean so you could keep it like that but I just liked having these kind of bent down so what I've done to get the fold is the corner this this side this I bring it in here we go so this piece here you want to line up with this line here which you will see you've got a line of um where we stuck it together so if I just bring this down and show you so I'm just going to bring it across I do it that way because it's better for me bring it right down and line up and then just pinch it like so so what I've done is folded it over there we go and you can see I've just brought it down so that straight edge lines up this piece here okay now again you could stick that down I actually quite like them like that it looks a bit like a collar so again with this one here I'm just going to bring it right over kind of start with your middle and you know get that all lined up with that and then you know that the rest will all just fall into place pop it down on its side and then just burnish those score lines again so you get a really nice crease and there you brings a completely different look again so again if you wanted to stick them keep the back you can do but again I'm going to fold it down because that's the way I liked it so I'm going to bring again starting from the middle pull it right down so it meets that score line that folded piece turn it over burnish bring oh twirling it right around pull that one right down again so there you have how lovely is that I really love it so got there in the end like I said it's not hard it's just a bit fiddly and it's hard for me to tell you what to do but I'm really hoping that that all came across well so now it's up to you how you want to decorate it because you've used the full two pieces of 12 by 12 I didn't want to cut into more 12 by 12 but if you've got some scraps we've got some nice if you're using like yellows and you've got some really nice craft cards you could do a paper handle but I'm going to use some ribbon so I'm just going to choose um I want quite thick I don't know whether to go for a bold yellow or whether I know I don't know I like that one I think it needs to be a bit more that's nice I think I'm going to use that one so I'm going to make a bow here and then I'm going to make um some for the handle so I'm just going to snip this off here and let's have a look so I don't want to do it too tall we'll just hold that next I didn't I've done them all different so I'm going to just show you what I'm doing for this one then you can decide so this measures at 19 inches the piece that I'm going to make here for my handle so do that in a second and then that leaves me with this piece here which is 17 inches which I'm going to do my bow for the front so I'm going to get that done first okay so I've done a little bow there and I've just got some foam double-sided squares and I'm going to use a little one I find the foam works really well with ribbon when you want to stick a bow down I've tried um different kind of glues and eventually they end up falling off whereas the ribbon is always stayed on so I'm sticking with that so I'm going to do yes that side is next that's got the knot just stick it on the back there again you can obviously decorate this however you want but I thought the wow fact is kind of in the bag shape itself so I didn't want to go too over the top with the decoration so I'm just popping that one in the middle I'm going to play around with that a little bit more a bit crooked up what the hell is that it's perfect it is good but it's gone a bit wonky I'm going to play around with that again in a minute okay anyway right now I want to do the right this side so I'm going to grab my whole punch pop it in the middle


Eric, relatively a good result with the white pieces against MVL.  Are you happy with the way things went? Yes, I'm quite happy. I mean, I went for this very old line with the night B5. I know it doesn't give an advantage, of course, but I mean, it's playable. It's like old favorite of full foundation, for example. Right, now before the game, when you were preparing, was it part of your strategy to sort of not push too much and just play solid chess because you're playing against a stronger grandmaster, even though you're white? Well, obviously, if I go for the same game, I mean, I mean, it's playable, but it's not the most ambitious maybe. Right, you're on one and a half out of two, so are you happy with your start here at the Tradewise Gibraltar Chess Festival? Sure, it's fine. Alright, good luck for the rest of the game. Thank you.