[jeff]

I have a question that I hope you can help me with…. I purchased the Becker CD’s and installed them on my PC. I have taken and passed all but one of the exams (BEC left).. I was checking to see if my software was up to date and noticed an expiration date of November 2013.. Does this mean my software ( downloaded from my CD’s) will no longer work after November….or will it no longer be supported but I can still take practice exams and do study questions etc?

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[Jennifer241]

Which of these is the best answer, they are all correct, but which is to most correct…. Those are the questions I HATE

AUD - Jan 9,13 Pass
REG - Aug 30,13 Pass
BEC - Oct 26,13 Pass
FAR - Dec 4,13 Pass

Licensed CPA in the state of Oregon

[Amay]

No I think it is asking for the incorrect choice. Choice # III is the only incorrect one meaning that is the correct answer choice…at least that is how I am interpreting it!

BEC: 73, 81
AUD: 85
FAR: 71, 77
REG: 74, 75...finally DONE! 😀

*This is my 2nd attempt at the CPA exam. For all of you who have failed this exam many times, given up on it, or taken a break like me, remember that it is still possible to finish what you started...failure is the opportunity to begin again more intelligently 🙂

[Amay]

No I think it is asking for the incorrect choice. Choice # III is the only incorrect one meaning that is the correct answer choice…at least that is how I am interpreting it!

BEC: 73, 81
AUD: 85
FAR: 71, 77
REG: 74, 75...finally DONE! 😀

*This is my 2nd attempt at the CPA exam. For all of you who have failed this exam many times, given up on it, or taken a break like me, remember that it is still possible to finish what you started...failure is the opportunity to begin again more intelligently 🙂

[ZSRizvi]

Ahahahah Yama, sorry I can't stop laughing because I came across that question too and just…no.

I'm really hoping the exam will have better worded answers.

Also, the interest on long-term debt is tax deductible right?

I'm going over Strategic Planning problems and one of them just…was really frustrating because it makes you go and calculate EACH and EVERY “solution” (meaning a through d) to come to the “right” answer. There's not enough time for that!

This is the one I'm talking about:

A company currently has 1,000 shares of common stock outstanding with zero debt. It has the choice of raising an additional $100,000 by issuing 9% long-term debt, or issuing 500 shares of common stock. The company has a 40% tax rate. What level of earnings before interest and taxes (EBIT) would result in the same earnings per share (EPS) for the two financing options?

a.

An EBIT of $10,800 would result in EPS of $7.92 for both.

b.

An EBIT of $27,000 would result in EPS of $7.20 for both.

c.

An EBIT of $27,000 would result in EPS of $10.80 for both.

d.

An EBIT of $18,000 would result in EPS of $7.20 for both.

—

What would you guys say the answer is if you were to calculate on your own?

(And this was a question that has been on past exams)

BEC (July 2013)
FAR (OCT 2013)
REG (NOV 2013)
AUD (JAN 2014)

The CPA Exam is an opponent that not even the Fellowship of the Ring would want to come across.

I have a long...long...journey ahead of me.

[ZSRizvi]

Ahahahah Yama, sorry I can't stop laughing because I came across that question too and just…no.

I'm really hoping the exam will have better worded answers.

Also, the interest on long-term debt is tax deductible right?

I'm going over Strategic Planning problems and one of them just…was really frustrating because it makes you go and calculate EACH and EVERY “solution” (meaning a through d) to come to the “right” answer. There's not enough time for that!

This is the one I'm talking about:

A company currently has 1,000 shares of common stock outstanding with zero debt. It has the choice of raising an additional $100,000 by issuing 9% long-term debt, or issuing 500 shares of common stock. The company has a 40% tax rate. What level of earnings before interest and taxes (EBIT) would result in the same earnings per share (EPS) for the two financing options?

a.

An EBIT of $10,800 would result in EPS of $7.92 for both.

b.

An EBIT of $27,000 would result in EPS of $7.20 for both.

c.

An EBIT of $27,000 would result in EPS of $10.80 for both.

d.

An EBIT of $18,000 would result in EPS of $7.20 for both.

—

What would you guys say the answer is if you were to calculate on your own?

(And this was a question that has been on past exams)

BEC (July 2013)
FAR (OCT 2013)
REG (NOV 2013)
AUD (JAN 2014)

The CPA Exam is an opponent that not even the Fellowship of the Ring would want to come across.

I have a long...long...journey ahead of me.

[Amay]

@ZSRizvi Ain't nobody got time for that! LOL

All I can say is interest on debt is tax deductible. What is the answer?

BEC: 73, 81
AUD: 85
FAR: 71, 77
REG: 74, 75...finally DONE! 😀

*This is my 2nd attempt at the CPA exam. For all of you who have failed this exam many times, given up on it, or taken a break like me, remember that it is still possible to finish what you started...failure is the opportunity to begin again more intelligently 🙂

[Amay]

@ZSRizvi Ain't nobody got time for that! LOL

All I can say is interest on debt is tax deductible. What is the answer?

BEC: 73, 81
AUD: 85
FAR: 71, 77
REG: 74, 75...finally DONE! 😀

*This is my 2nd attempt at the CPA exam. For all of you who have failed this exam many times, given up on it, or taken a break like me, remember that it is still possible to finish what you started...failure is the opportunity to begin again more intelligently 🙂

[ZSRizvi]

LOL. I was totally expecting that response.

The answer is “C.”

They take $27000 and deduct the entire $9000 of interest instead of just $5400 (which would be the after-tax cost). Then from that ($18000) the tax is deducted to come to Net Income which is divided by 1000 shares.

The Equity Alternative is $27000 – $0 = $27000 – $10800 tax = $16,200 which is divided by 1500 shares.

Both of the alternatives once divided by the shares come out to be $10.80.

—

I don't understand why interest isn't deductible in this case?

BEC (July 2013)
FAR (OCT 2013)
REG (NOV 2013)
AUD (JAN 2014)

The CPA Exam is an opponent that not even the Fellowship of the Ring would want to come across.

I have a long...long...journey ahead of me.

[ZSRizvi]

LOL. I was totally expecting that response.

The answer is “C.”

They take $27000 and deduct the entire $9000 of interest instead of just $5400 (which would be the after-tax cost). Then from that ($18000) the tax is deducted to come to Net Income which is divided by 1000 shares.

The Equity Alternative is $27000 – $0 = $27000 – $10800 tax = $16,200 which is divided by 1500 shares.

Both of the alternatives once divided by the shares come out to be $10.80.

—

I don't understand why interest isn't deductible in this case?

BEC (July 2013)
FAR (OCT 2013)
REG (NOV 2013)
AUD (JAN 2014)

The CPA Exam is an opponent that not even the Fellowship of the Ring would want to come across.

I have a long...long...journey ahead of me.

[Zaq]

WTF. This is driving me nuts.

Becker keeps saying that the difference for the PURE DADS mnemonic is ALWAYS Standard – Actual, but the formula for the DM and DL variances is always (Actual – Standard).

Am I on crazy pills? I think even Jeff's audio says something about SAM and SAL which = Standard – Actual.

If you have Becker I'm referring to B2 Pg. 42

So which one is it!? Is Becker wrong on Pg. 42? Or am I understanding this incorrectly?

FAR: 50, 76!
REG: 74... (ouch baby, very ouch), 76!
AUD: 65, 91!?
BEC: 80! Aaaand doneskies!

May 2012 to August 2013. Can't believe it's over.

[Zaq]

WTF. This is driving me nuts.

Becker keeps saying that the difference for the PURE DADS mnemonic is ALWAYS Standard – Actual, but the formula for the DM and DL variances is always (Actual – Standard).

Am I on crazy pills? I think even Jeff's audio says something about SAM and SAL which = Standard – Actual.

If you have Becker I'm referring to B2 Pg. 42

So which one is it!? Is Becker wrong on Pg. 42? Or am I understanding this incorrectly?

FAR: 50, 76!
REG: 74... (ouch baby, very ouch), 76!
AUD: 65, 91!?
BEC: 80! Aaaand doneskies!

May 2012 to August 2013. Can't believe it's over.

[Anonymous]

@Jennifer – THANK YOU! That makes so much more sense… Wondering why they wouldn't have said that anywhere in the answer explanation? they made it seem like we should just know the annuity tables…

[Anonymous]

@Jennifer – THANK YOU! That makes so much more sense… Wondering why they wouldn't have said that anywhere in the answer explanation? they made it seem like we should just know the annuity tables…

[Zaq]

Also, is the term “Standard” synonymous with “Budgeted”?

Because I feel like I see them being used interchangeable through out the text.

FAR: 50, 76!
REG: 74... (ouch baby, very ouch), 76!
AUD: 65, 91!?
BEC: 80! Aaaand doneskies!

May 2012 to August 2013. Can't believe it's over.

[Zaq]

Also, is the term “Standard” synonymous with “Budgeted”?

Because I feel like I see them being used interchangeable through out the text.

FAR: 50, 76!
REG: 74... (ouch baby, very ouch), 76!
AUD: 65, 91!?
BEC: 80! Aaaand doneskies!

May 2012 to August 2013. Can't believe it's over.

[Author]

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