Assignment task:
OTTAWA, Ont.-Would you like to work from home forever? If yes, then you might want to consider applying to a company like Shopify, the Ottawa-based e-commerce giant. Soon after its employees were forced to work remotely when the COVID-19 pandemic hit in 2020, the company gave them $1,000 each to set up home offices. Several months later, Shopify announced it was moving to a "digital-by-default" model: the expectation that most employees, whom it calls "Shopifolk," would permanently work remotely. "Office centricity is over," Shopify CEO and founder Tobias Lütke tweeted.
The pandemic affected Shopify in other ways. With stores shut to help stop the spread of the virus, many merchants set up sites for customers to order online and get their goods delivered or picked up curbside. Shopify provides the technology for even the tiniest business to set up an e-commerce site. It charges merchants a monthly subscription fee and sometimes a fee per transaction and a percentage of sales, depending on the customer's plan. The explosion in online shopping during the pandemic helped the company nearly double its sales, from US$1.6 billion in 2019 to US$2.9 billion in 2020. Shopify serves more than 1.7 million merchants in 175 countries around the world. To fuel this growth, Shopify went on a hiring spree in 2020. At the end of 2019, it had roughly 5,000 employees and contractors around the world. At the end of 2020, that number had grown to more than 7,000. And in 2021, it planned to hire at least another 2,000 people. How does this expanding headcount show up in the company's books? As in all companies, the money that Shopify owes to employees for services rendered is considered a current liability. On its consolidated balance sheets, payroll liabilities are part of its accounts payable and accrued liabilities, which as at December 31, 2020, were US$300.8 million-up from US$181.2 million the year before. Of those amounts, US$61.9 million concerned employee-related accruals at the end of 2020, nearly double the US$32.4 million owed at the end of 2019.Shopify does not break down payroll expenses in its consolidated statements of operations and comprehensive income. Instead, it includes the costs of salaries and employee benefits in its various operating expenses. For example, the cost of sales personnel is included in sales and marketing expenses, the cost of software developers is part of research and development expenses, and the cost of employees in finance and accounting, legal, administrative, human resources, and IT is part of general and administrative expenses.