[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.]

The Herb Salter Corporation is considering a plant expansion that will increase its sales and net income. The following data represent management’s estimate of the impact the proposal will have on the company:

Current

Proposed

Cash

$ 120,000

$ 140,000

Accounts payable

360,000

450,000

Accounts receivable

400,000

550,000

Inventory

360,000

420,000

Marketable securities

180,000

180,000

Mortgage payable (current)

160,000

310,000

Fixed assets

2,300,000

3,200,000

Net income

400,000

550,000

The effect of the plant expansion on Salter’s net working capital will be a(n)

A. Increase of $230,000.

B. Increase of $240,000.

C. Increase of $10,000.

D. Decrease of $10,000.

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]

I know this answer so I will leave it for someone else, btw, it will be difficult for others to understand this question based on the way its structured here.

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[M.O.D.]

Which one of the following statements concerning cash flow determination for capital budgeting purposes is not correct?

A. Proceeds from disposal of old equipment should be included in cash flow forecasts.

B. Sunk costs are not incremental flows and should not be included.

C. Book depreciation is relevant because it affects net income.

D. Tax depreciation must be considered because it affects cash payments for taxes.

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]

Book depreciation is relevant because it affects net income.

The above statement is not true

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[M.O.D.]

If a company is customer-centered, its customers are defined as

A. Anyone external to the company and those internal who rely on its product to get their job done.

B. Only people internal to the company who directly use its product.

C. Everybody external to the company who is currently doing, or may in the future do, business with the company.

D. Only people external to the company who have purchased something from the company.

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]

C?

BEC 8/14/14 - Passed
Graduated from college 12/13/14
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REG
FAR

[M.O.D.]

Answer (A) is correct.

One of the tenets of total quality management is customer orientation, whether the customer is internal or external. An internal customer is a member of the organization who relies on another member’s work to accomplish his/her task.

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)

[Kimboroni]

I was waffling between A and C on that one.

AUD 84 (1/9/14-Wiley books/TB + free materials)
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BEC 76 (10/5/14-Wiley books/TB + NINJA Audio/FC)

Disclaimer: My ninja avatar is not meant to imply that I have any affiliation with this site other than being a forum member. That's a pic of a T-shirt that my daughter gave me for my birthday. 🙂

[Anonymous]

So almost a week through studying and man I hope I'm not the only one is having trouble remembering all of this stuff..

Nothing seems incredibly hard but just the thought of needing to know a little bit of “everything”.. Also, anyone else using CPAExcel.. how are you partitioning your time for WC? Doesn't seem to be included in the lesson times

Thanks and GL to all!

[M.O.D.]

Trick question:

Assuming no beginning work-in-process (BWIP) inventory, and that the ending work-in-process (EWIP) inventory is 50% complete as to conversion costs, the number of equivalent units as to conversion costs would be

A. Less than the units completed.

B. Less than the units placed in process.

C. The same as the units completed.

D. The same as the units placed in process.

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]

B. Less than the units placed in process.

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Mass-CPA

[GoVPI]

MOD can you explain that trick question? Thanks.

Also the customer question above, I was between A and C also. I can see why A

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

[stoleway]

Question…

Comparing actual results with a budget based on achieved volume is possible by using ….

a)static budget

b) Master budget

c)Flexible budget

d) Zero based budget

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Mass-CPA

[M.O.D.]

Answer: flexible budget

Re: trick question

If 50% of the labor is found in ending inventory then that divides ending inventory by 2

Since the units placed in process are not divided (are whole), the divided units are less than the whole units.

This is my best explanation…

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]

MOD …have you tried the ninja questions yet? Gosh, lots of tricky and difficult questions in there.

I usually score 90ish in Gleim, but im hitting 70s in ninja.

So depressing.

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Mass-CPA

[Author]

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