[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

[GoVPI]

A company has $1,500,000 of outstanding debt and $1,000,000 of outstanding common equity. Management plans to maintain the same proportions of financing from each source if additional projects are undertaken. If the company expects to have $60,000 of retained earnings available for reinvestment in new projects in the coming year, what dollar amount of new investments can be undertaken without issuing new equity?

$0

$ 24,000

$ 90,000

$150,000

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

[stoleway]

@CPAin14

This is a tricky one…..is it 90,000?

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

Mass-CPA

[M.O.D.]

@ Hudini

I think Wiley is more correct. Capital projects are long term projects, and they should be funded by long-term capital.Thus the main concern is how much will those new long-term funds cost the company. That would determine the WACC which would be hurdle rate which determines if projects can be undertaken.

And if you measure WACC, it is all about bonds, preferred stock and equity, all long-term capital. Short term cash equivalents do not even enter the picture.

@ CPA14

1.5 + 1 = 2.5 = 100%

60% debt + 40% equity = 100%

90,000 (new debt) + 60,000 (RE equity) = 150,000 total capital available using existing equity only

@zack

I was reading that you are spending a lot of money on private tutoring.

If you struggle with math, FAR I think is even more challenging, in terms of detail. BEC is more broad, ie the calculations are not as tricky.

Have you considered an intermediate step before the CPA? I was reading the thread that the CIA is easier than the CPA. You could build your confidence by taking small successful steps, with something to show for your efforts…

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)

[JamesBJames]

My BEC exam didn't have many hard calculations at all. If Becker's questions were, “Find A and use it to find B, then use that to find C,” the CPA exam questions were just “Find A.” I was really surprised by how straightforward the calculations were. I'm assuming I had difficult testlets too.

FAR: May 1st, 2014 - 91
AUD: May 29th, 2014 - 97!
BEC: July 16th, 2014 - 91
REG: August 29th, 2014 - 88

Licensed December 2015

Feel free to add me on LinkedIn by clicking my username!

[HeartsMimiCPA]

So I'm less than 30 days from my exam date. I ended up moving my exam to the end of the month because I originally picked the 15th thinking it'd give me a week wait for score release. Anyway, i'm having a hard time just getting through the book. I lack serious focus. I'm on chapter 4 of 6.

I just purchased the Ninja notes and I think instead of reading anymore i'm going to copy them as much as I can and then do non stop mcq's for the last two weeks. Thoughts?

AUD - 65, 89!
REG - 70, 89!
FAR - 78!
BEC - 77!

Finally!
Experience 06/30/15
Ethics-Done

VA Licensed 09/15/15

[Zackrampage]

@James I am glad to hear that and actually you aren't the first person to say that. My exam is Aug 28th so plan to keep pounding questions till then.

FAR - 62 , End of aug 2015
BEC - 67, 67
AUD - TBD
REG - TBD

[M.O.D.]

Trick question:

A department adds material at the beginning of a process and identifies defective units when the process is 40% complete. At the beginning of the period, there was no work in process. At the end of the period, the number of work-in-process units equaled the number of units transferred to finished goods. If all units in ending work in process were 66% complete, then ending work in process should be allocated

A. 50% of all normal defective unit costs.

B. 40% of all normal defective unit costs.

C. 50% of the material costs and 40% of the conversion costs of all normal defective unit costs.

D. None of the normal defective unit 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)

[GoVPI]

D..None of the costs? Because normal defective units is accounted for? If it were abnormal, it would get costs? just my guess!

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

[stoleway]

Answer is A…It's just one of those questions I have memorized simply because both the question and the explanation of the answer does not make sense to me.

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

Mass-CPA

[M.O.D.]

Yes, it did not make sense to me the first time around (or second), but I think I figured it out.

Because the ending inventory is 66% complete, it is past the 40% when defective units were identified.

Both ending and completed are equal, say 100 each with 200 started.

If say 10 units were defective, the total cost stays in WIP. That is how normal units are accounted for, CPA14. The costs stay in WIP but are allocated amongst fewer (only the good) units.

So the question is how many good units do you have. If you use equivalent units as being 66% complete you don't get the right answer. This is because the allocation happens when all units are at 40% complete. That is when the decision and the division of costs happens. And since that batch is divided in two: half complete (100% conversion) and half ending inventory (66% conversion), you get 50/50.

This is the only reasoning that explains the answer: the division happens at inspection, not at the end of the accounting period.

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)

[Zackrampage]

In my opinion the fact that I have seen becker do this on more than one occasion is simply not acceptable:

“The factor for present value of an annuity for five yrs at 10% is 3.791. The factor for PV of $1 for five years is 10). The future value of $1 at 10% for five years is 1.611. The factor for future value of an annuity for five years at 10% is 6.1053

Given a 10% discount rate with cash inflow of 3,000 a year for five years and an initial investment of 11,000, what it the net present value?

a) 11,370

b) 4,000

c) (9,500)

d) 370

Now! This is really not a hard question. But the exact answer isn't there and beckers explanations says “The closest answer is _____ so pick it”. And its not even a round issues. The right answer is several dollars off. In my opinion they shouldn't do that because you can get thrown off. Or are they doing this because NPV doesn't give u the exact number?

FAR - 62 , End of aug 2015
BEC - 67, 67
AUD - TBD
REG - TBD

[stoleway]

@zack…this shouldn't be a problem at all, when you look at choices, it's very clear that best answer is $370.

I got 373 but I know that 370 is very close and should be the best answer.

Remember you're dealing with decimals here and some of these figures are usually rounded to the nearest hundreds or thousands etc

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

Mass-CPA

[M.O.D.]

It is because they used the multiplier of 3.79 instead of 3.791 to make the answers. So it is a rounding issue.

And yes, you often have to round to dollars, to tens or even to hundreds.

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]

ANK Company owes a Grande Bank $10,000. Ank Company cannot pay. Jones is a surety on the debt for $6,000. Smith is also a co-surety on the same debt for $6,000. Grande Bank releases Jones without reservation of rights against Smith. For what amount is Smith now obligated to the Grande Bank in connection with this debt? –

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

Mass-CPA

[GoVPI]

i had the above question once, I posted on here. Its like 3000 or 4000. I thought it was the entire 6000, but no. I don't really understand why the answer is what it is.

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

[Author]

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