[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.]

Answer:

Buying a put option.

This allows the company to sell the stock at a current price rather than suffer with the market drop.

Simultaneously, the value of the put option rises as the stock falls, that that is a valid hedge.

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]

Great…thx MOD

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

Mass-CPA

[Anonymous]

See you guys tomorrow.. Beginning my BEC journey with an 8/29 test date… Let's do it 🙂

[GoVPI]

Can someone explain put options vs call options & buying/selling

Thanks

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

[RandomAlt]

@CopyPasteMonkey …

I see you are giving yourself one month to study for BEC. Do you have a plan of action to get through the material in time. Do you feel you already have a grasp of the material (like you are really good with Economic concepts, etc).

Just wondering because I am taking the exam on 8/31, started 2 weeks ago, and don't feel like I am going to absorb all of the material in time.

FAR - [10/07/2013 --> 66] [07/07/2014 --> 86]
BEC - [08/31/2014 --> 86]
AUD - [11/24/2014 --> 88]
REG - [02/14/2015 --> 92]

[M_Knight]

For B2 in Becker, does anyone have any suggestions or guidance on the best way to tackle B2? In B1 it went well and got above 80% on each topic but this B2 seems to be really tough and got a 63% in forecasting and planning first time through. I made notecards of formulas but it seems the questions go so much beyond that. Any suggestions?

[Anonymous]

“Can someone explain put options vs call options & buying/selling”

If I own a put, I can make you buy something from me (why would I buy a put? Well, If I am afraid my stock is going to go down I want to make sure I can sell it at a certain price)

If I own a call, I can make you sell me something.

[M.O.D.]

Re Put, Calls:

Yes, a put is an option, ie the option to put the stock in someone else's hand (the option writer), at a prearranged price.

A call is the option to call the stock from someone (the option writer) at a prearranged price.

Both of these options require the prepayment of a premium (to the option writer) for the privilege to have the ability to put and call.

They are derivatives since their values are derived from the underlying stock (or currency, commodity, etc).

They are used to speculate and hedge.

If you think a stock will go up, you buy a call option, and make a profit by exercising your option in the future.

If you don't agree, ie stock will remain flat, you could write a call option contract, ie get the premium from a sucker who thinks the stock will be going up.

If it does not rise, then you keep the premium.

If you think a stock will go down, you buy a put option and sell the stock at a higher price than the decline price.

Likewise, if you don't agree, and think stock will remain flat or increase, you write the put option for the premium.

Secondary markets are available for the options themselves. Ie. 90% of the options traded are never exercised, they are just sold back to the writers. Their value is based on the difference between the exercise price and the underlying asset (stock).

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)

[Anonymous]

@RandomAlt I use CPAExcel's study planner which tells me how many hours per week I need to get through the material. I'm actually probably weakest on the things contained in this exam (as I'm sure most candidates are; these topics were covered sophmore/junior year for me at least). I study “full-time” or at least try to :-)! I will keep you posted on my progress, how has your experience been so far?

[RandomAlt]

@CopyPasteMonkey …

I'm also using CPAexcel and the study planner. I actually have mine set for exactly 1 month of study (assignments run from 7/14/2014-8/15/2014). That gives me two weeks for review.

Even with that said…they pack a lot of material into each section. There are so many concepts in Corporate Governance alone that I am worried I wont be able to absorb as much as I need by exam day.

You should be fine if you are studying full time. I work full time, so I just study in the morning, lunch break, some evenings, and 1 full day during the weekend.

My experience hasn't been bad. I enjoyed economics so that section was interesting…but at the same time, there are just sooooo many concepts and equations to memorize.

FAR - [10/07/2013 --> 66] [07/07/2014 --> 86]
BEC - [08/31/2014 --> 86]
AUD - [11/24/2014 --> 88]
REG - [02/14/2015 --> 92]

[mwccpa]

Hello All,

I've been reading various comments since I first set for a section in May of 2014 to get a feel for what's being discussed. Fast forward to now and I'm joining the ranks while waiting on an AUD score to grace me with it's presence come this August. I've seen a couple people using Gleim but still wanted to see who all has it in case I wanted to bounce information off someone. Any people from Oklahoma? I've got BEC down for the 28th of August so let's do this!

Are you tired of BARFing yet?

FAR - 87 - 05/28/14
AUD - 86 - 07/24/14
BEC - ?? - 08/28/14
REG - ?? - 10/17/14

Oklahoma Candidate

Using Gleim for exam materials on the computer, Yaeger flash cards and Wiley test bank for iphone.

[stoleway]

@mwccpa

I'm also using Gleim l, I have used it for all the other sections as well. My retake is also on the same day as yours, good luck to you. btw, I'm not OK candidate but I will transfer my scores to OK once its all done.

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

Mass-CPA

[mwccpa]

For this question posted earlier:

What is the cost of ending inventory given the following factors?

Beginning inventory $ 5,000

Total production costs 60,000

Costs of goods sold 55,000

Direct labor 40,000

$ 5,000

$10,000

$45,000

$50,000

I see and understand Stoleway's answer. I just wanted to expand the answer to explain that the direct labor of 40,000 is a distractor because it is already included in total production costs. Correct that if it's wrong but that's how I understand it.

Also, I'd have to go back and find it but somewhere near the beginning of this thread someone posted a q that didn't look like they got an answer.

Are you tired of BARFing yet?

FAR - 87 - 05/28/14
AUD - 86 - 07/24/14
BEC - ?? - 08/28/14
REG - ?? - 10/17/14

Oklahoma Candidate

Using Gleim for exam materials on the computer, Yaeger flash cards and Wiley test bank for iphone.

[M.O.D.]

I too am using Gleim. I use it exclusively, ie no other materials. From seeing Becker questions and AICPA released questions on here, they are in Gleim too, so what is the point of seeking other questions. Though I heard that there is a site with CPA questions for free with non-AICPA type questions.

As far as this problem, yes, 40,000 is a distractor because it is already included in total production costs.

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)

[Anonymous]

I'm in here! Ready to see a passing score again… let's do this!

[Author]

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