[jeff]

@h0wdyus

Incorrect

The answer is B. Comparable sales.

“The use of comparable sales is not an income approach to valuation of a business, it is a market approach. Under the comparable sales approach, the value of a business is determined by comparing it to other entities with comparable characteristics for which the value is more readily determinable.”

This was a tricky one

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

[M.O.D.]

@ CPAin14

The assumption in the question contradicts the calculation of the average collection period.

If half pay in 10 days and the other half pay in 30 days, the average collection period is 20 days, not 25 days.

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[linkman311]

Can someone explain the answer to this question in a different way? The “solution” just repeats the answer and doesn't explain why.

What is correct if a seller extends credit to a purchaser for a period of time longer than their operating cycle? The answer is “The seller is, in effect, financing more than just the purchaser's inventory needs.”

Thanks!

Confidence is a prerequisite for success

FAR - 1/1
AUD - 1/1
BEC - 1/1
REG - Q4

Have Becker, wish I got Roger

[Priscilla]

Hello everyone!

First time studying for BEC

any recommendations on how to study for the 100+ formulas?

I'm on chapter one (Becker) and already struggling to remember just 20-25 formulas….

should I stay on subject until “mastered”? or move on? Exam is in 5 weeks and already nervous that I will not have enough time to get through material…..

Thanks!

Priscilla

AUD - Done
REG - Done
BEC - Done
FAR - August 2015

[M.O.D.]

@ linkman

operating cycle = inventory cycle (days in inventory) + AR cycle (days in AR) = time from purchase of inventory to receipt of cash from the final customer

So if the supplier of inventory extends just enough credit, then he gets paid at the time his customer gets paid (equal to the customer's operating cycle)

If the customer holds on to the credit for longer, then he is in effect financing more than the sale of the inventory transactions. ie. He is financing his customer's other needs: his mortgage, taxes payable, etc.

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[M.O.D.]

@ Priscilla

I make a list of the formulas and write them down all daily.

Pray tell why did you schedule the test in 5 weeks before even starting to study. I see that a lot here. People schedule the test first and start studying second.

You wouldn't schedule your wedding before even meeting your boyfriend. Why schedule a test before you know what is on it? This is blowing my mind.

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[linkman311]

@ M.O.D.

Thanks, that makes sense now. Becker frustrates me with some of their “explanations” which are not that at all!

Confidence is a prerequisite for success

FAR - 1/1
AUD - 1/1
BEC - 1/1
REG - Q4

Have Becker, wish I got Roger

[GoVPI]

I have been studying since April for this test. Granted I've taken a long break for school exams but there was no way I was scheduling before I thought I could at least have a shot at passing. I'm doing the same for AUD. I have to take it by Jan 3 2015, if i have to, i'll schedule that day. I want to pass these.

BEC 8/14/14 - Passed
Graduated from college 12/13/14
AUD 8/31/15 - 74. Retake - Passed
REG
FAR

[stoleway]

MOD …Thanks for the explanation on the RRR question, it makes sense now:)

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[GoVPI]

Is this a good CPA exam question?

Walman Company is budgeting sales of 42,000 units of product Y for March 2012. To make one unit of finished product, three pounds of raw material A are required. Actual beginning and desired ending inventories of raw material A and product Y are as follows:

3/1/12

3/31/12

Raw material A 100,000 pounds 110,000 pounds

Product Y 22,000 units 24,000 units

There is no work in process inventory for product Y at the beginning and end of March. For the month of March, how many pounds of raw material A is Walman planning to purchase?

126,000

132,000

136,000

142,000

BEC 8/14/14 - Passed
Graduated from college 12/13/14
AUD 8/31/15 - 74. Retake - Passed
REG
FAR

[M.O.D.]

@CPA14

Yes, this question is in Gleim too (must be AICPA released)

units needed to produce = 44 = 24+42-22

so lbs needed to make 44 units = 44×3 =132

purchase needed = 142 = 110+132-100

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[GoVPI]

@ MOD.. I'm like crying because I knew how to do it! That section is so tough for me.

BEC 8/14/14 - Passed
Graduated from college 12/13/14
AUD 8/31/15 - 74. Retake - Passed
REG
FAR

[M.O.D.]

Cost accounting is many simple rational steps, whose only purpose is to help the company, not to meet external regulations.

No leap of logic or reason needed like the other CPA sections, just repeated basic T-acct calculations.

Think of yourself as hired consultant to assist the company with their assembly line or production line, budget etc.

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[How many letters do you need]

Cost Accounting on exams,and especially the CMA, is mostly internal focused but in the real world there is a fair amount of external reporting/GAAP related inventory topics they are involved with. The part that the exams focus on is actually only a small part of what a cost accountant (and especially a cost accounting manager) will focus on.

MBA,CMA,CPA, CFF?, ABV?

[M.O.D.]

@ letters

Do you think studying and passing the CPA sections are helping you with your work?

Are you seeing more opportunities now than before the CPA exam?

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[stoleway]

A company has recently purchased some stock of a competitor as part of a long-term plan to acquire the competitor. However, it is somewhat concerned that the market price of this stock could decrease over the short run. The company could hedge against the possible decline in the stock’s market price by

A. Selling a put option on that stock.

B. Purchasing a put option on that stock.

C. Obtaining a warrant option on that stock.

D. Purchasing a call option on that stock.

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[Author]

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