[jeff]

BEC Resources:

Free BEC Notes & Audio – https://www.another71.com/cpa-exam-study-plan

BEC 10 Point Combo: https://www.another71.com/products-page/ten-point-combo

BEC Score Release: https://www.another71.com/cpa-exam-scores-results-release

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

[UCMCPA]

Qlad.

You have two options for financing; equity of debt. Issuing equity will raise your common shares outstanding. Debt interest is deductible, so we have to account for that.

If you were to issue more stock. You have 27,000 EBIT (earnings before interest and taxes) x (1-.4) = 16,200. Now, initially you only had 1,000 shares, but we chose to issue more shares increasing it to 1500. Therefore 16,200 / 1500 = 10.8

If you were to issue debt. You have 27,000 EBIT – INTEREST on the debt b/c it's deductible. 100,000 x .9% = 9,0000 = 18,000 in earnings after interest. Take 18,000 and subtract out the tax (1 -.4). 18,000 x .6 = 10,800. Because we didn't issue more shares, use the original amount of 1,000. 10,800 / 1000 = 10.8 EPS

FAR - 84
AUD - 94
REG - 86
BEC - 86

[Qlad]

Ok Ucmcpa….how do you get 27000?…

FAR 72,71,81 🙂
AUD 64,71, 72, 75 🙂 I'm done !!!
REG 73, 74, 74, 84 🙂
BEC 76 🙂

[Qlad]

Ok Ucmcpa….how do you get 27000?…

FAR 72,71,81 🙂
AUD 64,71, 72, 75 🙂 I'm done !!!
REG 73, 74, 74, 84 🙂
BEC 76 🙂

[UCMCPA]

I just use it from the problems given and test out the numbers to see which makes sense.

FAR - 84
AUD - 94
REG - 86
BEC - 86

[UCMCPA]

I just use it from the problems given and test out the numbers to see which makes sense.

FAR - 84
AUD - 94
REG - 86
BEC - 86

[Qlad]

thanks….i got it now

FAR 72,71,81 🙂
AUD 64,71, 72, 75 🙂 I'm done !!!
REG 73, 74, 74, 84 🙂
BEC 76 🙂

[Qlad]

thanks….i got it now

FAR 72,71,81 🙂
AUD 64,71, 72, 75 🙂 I'm done !!!
REG 73, 74, 74, 84 🙂
BEC 76 🙂

[princeCPA]

Qlad

EBIT-Int-Tax/1500=EBIT-Int-Tax/1000

Let EBIT = x

[x-0-.4(x)]/1500=[x-9000-.4x]/1000

.6x/1500=[.6x-9000]/1000

600x=900x-8,100,000

300x=8,100,000

x=27,000

Hope it helps but UCMCPA's way could be match faster.

BEC 79
FAR 86
AUD 79
REG 90

[princeCPA]

Qlad

EBIT-Int-Tax/1500=EBIT-Int-Tax/1000

Let EBIT = x

[x-0-.4(x)]/1500=[x-9000-.4x]/1000

.6x/1500=[.6x-9000]/1000

600x=900x-8,100,000

300x=8,100,000

x=27,000

Hope it helps but UCMCPA's way could be match faster.

BEC 79
FAR 86
AUD 79
REG 90

[princeCPA]

I think I missed this calculation in the process:

[x-9000-.4(x-9000)]/1000

[.6x-5400]/1000

BEC 79
FAR 86
AUD 79
REG 90

[princeCPA]

I think I missed this calculation in the process:

[x-9000-.4(x-9000)]/1000

[.6x-5400]/1000

BEC 79
FAR 86
AUD 79
REG 90

[Qlad]

wow…princecpa….i tried my best to understand that calculation…i am bad at math….and definitely , will eat 1-2 steps in exam …still working on it…thanks a lot

FAR 72,71,81 🙂
AUD 64,71, 72, 75 🙂 I'm done !!!
REG 73, 74, 74, 84 🙂
BEC 76 🙂

[Qlad]

wow…princecpa….i tried my best to understand that calculation…i am bad at math….and definitely , will eat 1-2 steps in exam …still working on it…thanks a lot

FAR 72,71,81 🙂
AUD 64,71, 72, 75 🙂 I'm done !!!
REG 73, 74, 74, 84 🙂
BEC 76 🙂

[Luvthebeach]

Thank you @thehip 41 & UCMCPA! Got it!

[Luvthebeach]

Thank you @thehip 41 & UCMCPA! Got it!

[Author]

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