[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

[stoleway]

@M.O.D…..since you asked, check this out for me. I would appreciate any critique from others as well.

TOPIC……Balance score card and its effect on Operations.

This memorandum has been prepared in response to your request that I discuss the concept of balance scorecard and its effect on our company's operations. Balance scorecard is a strategic planning and management system used extensively in business and organizations worldwide. Benefits of this system includes increasing focus on results, aligning business activities with the organizational strategy and improving performance and communication.

Balance scorecard proposes that the organization should be viewed from four perspectives, with metrics developed, data collected and analyzed for each of them. The four perspectives are: customer, financial, internal business processes, and learning, growth and innovation. Management must therefore understand each element under these perspectives and apply them effectively throughout the company's operations.

The discussion above is not exhaustive; however, each perspective provides a specific guidelines towards achieving the organizations objectives. I would be delighted to meet you further and discuss into detail how these perspectives affects operations. I hope my memo has addressed the questions you had asked. Should you require any further assistance please do not hesitate to contact me at 555 5555 555

Yours sincerely

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

Mass-CPA

[klink24]

Test at 1:30 today. I'll let you guys know how it goes! Thanks for the discussion and pointers.

FAR: 4/19/2014 - 85!
AUD: 5/27/2014 - 90!
REG: 7/18/2014 - 81!
BEC: 8/13/2014 - 84!

4 up, 4 down, in 4 months.

Licensed 9/22 in NC.

[M.O.D.]

I prepared this memorandum (use active voice) to address/discuss.. (avoid unnecessary verbiage).

Define the term first, discuss it second.

The balance scorecard method defines (use stronger language than proposes)

Use shorter sentences.

You listed 5 perspectives.

“understand each element under these perspectives” does not make sense to me.

“… not exhaustive (unnecessary), just address the points. The more points, the higher your point score.

You should give an example for each of the balanced scorecard points.

The entire last paragraph delete.

Leave out yours sincerely, that is not part of a memo.

I would write like this:

Balance scorecard proposes that the organization should be viewed from four perspectives.

The four perspectives are: customer, financial, internal business processes, and learning, growth and innovation.

(Give examples for each )

Management must apply them effectively throughout the company's operations.

(Give example)

, with metrics developed, data collected and analyzed for each of them. (explain, give example)

Balance scorecard is a strategic planning and management system used extensively in business and organizations worldwide. Benefits of this system includes increasing focus on results, aligning business activities with the organizational strategy and improving performance and communication.

Give examples.

Unless you have examples, I would not write theory words. It just becomes meaningless jargon.

Sorry if this review is harsh.

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)

[mikecuh]

@jbiele

Please do post some of those questions as I'm not familiar with any of those concepts! And my test is tomorrow!

[stoleway]

@M.O.D.

Its a great critique, they are well noted. I will prepare another one next week.

With regards to WC, I read on several reviews that you're not supposed to be an expert on the subject matter.

Lets assume that I have limited knowledge on this subject matter, would this memo not be enough to prove that I have proper writing skills?

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

Mass-CPA

[jbiele22]

Here are some I thought were really hard. They were also labeled as “Difficult” by the AICPA.

Each of the following is an effect from opening markets to foreign investment, except”

a. An increase in the correlation of emerging stock markets with world markets

b. A change in the volatility of emerging stock market returns

c. A decrease in local firms' cost of capital

d. A decrease in investment growth rates

Choice “d” is correct. Opening markets to foreign investment is encompassed within globalization, which is the distribution of industrial and service activities across many nations. Investment growth rates will likely increase (rather than decrease) through globalization, as there are more opportunities for investment and growth.

Which of the following concepts can best be used to understand oligopoly behavior?

a. Interindustry competition.

b. Herfindahl index.

c. Game theory model.

d. Concentration ratio.

Choice “c” is correct. Game theory is a study of mathematical models of conflict and cooperation between rational decision makers. There are several versions of game theory models that are used to evaluate participant behavior under oligopolies.

A U.S. parent company is reviewing the cash flows from its international subsidiaries. In addition to exchange rate risk, which of the following items would be a primary consideration in the company's cash flow analysis?

a. American depository receipts.

b. Default risk premium.

c. Foreign trade deficit.

d. Repatriation restrictions.

Choice “d” is correct. Repatriation restrictions exist when a company invests money in a foreign company but is restricted from bringing that money back to its home country. These restrictions would affect the cash inflows expected from the investment.

I personally don't feel that Becker prepared me for these questions and I'm nervous for my test on Saturday. Out of the 40 new BEC ones released I only got a little over half right. I was really feeling good about the test until I saw these.

FAR 81
AUD 87
REG 77
BEC 8/16/14

[M.O.D.]

@ stoleway

Rather than theory, let's deal with the facts:

You do know what balanced scored means: Explain it, justify it, support it.

Explain it now: this evening. No need to wait.

I will tell you if it is well written, let's not waste time saying no.

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)

[mikecuh]

Yeah those questions are definitely B5 and B6 questions.. Oh man now I'm worried about my test tomorrow. I wish I had access to those questions

[stoleway]

MOD…very well, thanks for pushing me to my limit..lol, I will put something together tonite.

Question….

A company produces 10 different products in 10 different plants. From the items produced in Plant 8, the company makes sales of $900,000. Variable costs are $300,000 in that plant and the fixed costs are $700,000. Because the plant is losing $100,000 per year, company officials close it at the start of the current year and lease the building to a competitor for a flat $360,000 per year ($30,000 per month). How does this decision impact the company’s overall net income for this year?

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

Mass-CPA

[TigerWoods]

No one else found B2 difficult?

[mikecuh]

Stoleway:

An extra $240,000 will be lost (The contribution margin – Income from lease) for a total of $340,000 loss.

[Peach1024]

Tiger, I found B2 to be the most difficult chapter out of all 6. In fact I stopped it halfway through, went to B3, got frustrated by all the formulas there, and finally did my studying in this order: B1, B4, B5, B6, B3, and then finally B2. It took me a long time to master B2 and I had to build up my confidence first or else I would have gotten stuck on it forever. Once you actually dig in and commit yourself to it, it's not as big of a deal … but I do think it helps to have the rest of the study materials already behind you.

AUD - 88
REG - 76
BEC - 88
FAR - scheduled for 10/20/14

[stoleway]

@mikecuh

Thats what I thought, but the answer is different according to cpareviewforfree

Currently, the company is losing $100,000 from Plant 8. Unless stated otherwise, the fixed costs will not be eliminated by closing the plant. Such costs include property taxes and insurance that are often unaffected by revenues and other variables. After closing, revenues will be $360,000 from the lease but the fixed expenses of $700,000 will remain so that the company will lose $340,000. Going from a loss of $100,000 to a loss of $340,000 reduces the company’s net income by $240,000.

I think cpareviewforfree got this solution wrong.

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

Mass-CPA

[TigerWoods]

It's mainly just the budgeting and variances that are holding me down. It's very frustrating.

[M.O.D.]

@ stoleway

Why is mike wrong? He said the same thing you are saying: income is reduced by 240.

The question really is how many of the fixed costs will remain, and how many can be avoided. If it is a building, depreciation and maintenance will remain, yes, but if the building is also a factory/plant, as posited in the question, then the expense associated with the equipment will change, since only the building is being leased, not the equipment inside…

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)

[Author]

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