[jeff]

Welcome to the Q4 2017 CPA Exam Study Group for BEC. 🙂

Introduce yourselves and let your fellow NINJAs know when you plan to take your BEC exam.

The Five Steps (NINJA Framework): https://www.another71.com/pass-the-cpa-exam/

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

[Anonymous]

Ana, see my and rencpa's posts on page 13

[Ana]

thanks Andy, I knew I saw it. Was memorizing all those formulas necessary? I have about half of them down…doubt I'll get it all by Friday evening. And even when I do know them I doubt myself and panic and confuse it all. Becker had a mnemonic I use and love but it only works for 4 of them. PURE DADS, anyone else use it? They offered it in the lecture and book pre-change.

[jenpen]

@Ana I found that mnemonic while I was looking around on here for help with variances. It has helped me so much on those questions! The one I saw was actual SAD PURE DADS DADS, which I'm sure is essentially what you were talking about.

I'm with you on confusing all of the formulas! I'm panicking right now while answering questions because I am still having to look a lot of them up and my exam is tomorrow. :-/

AUD - 56 - 68 - 61 - 9/8/16
REG - 75
FAR - 7/15/16
BEC - TBD

Wiley CPAexcel and NINJA 10 Point Combo

[Ana]

Yes, that's what I'm referring to. Only issue is it doesn't help with OH variances. UGGGHHHHH hate BEC!!!

[jiji]

Can someone please try to help me solve this?

AR beginning $100k
Sales credit $200k
AR ending $150k
Write off $10k
Allowance for uncollectible $20k
Sales Return $10k
Sales discount $10k

Find the Accounts receivable turnover? Net credit sales/average net receivables

This is what I have done ($200-$20-$10-$10)/((150-10)+100/2)=160k/120k= 1.33 Is this correct?

[jiji]

Can someone please explain this to me. How is the net credit sales calculated? I thought in this problem it would be $400k minus $20k. Why does the solution indicate that the numerator is $400k instead of $380k?

The controller of Peabody, Inc. has been asked to present an analysis of accounts receivable collections at the upcoming staff meeting.
The following information is used:

Accounts receivable
$100,000 yr2
$130,000 yr1
Allowance, doubtful accounts
(20,000) yr 2
(40,000) yr 1
Sales
400,000 yr 2
200,000 yr 1
Cost of goods sold
350,000 yr2
70,000 yr1

What is the receivables turnover ratio as of December 31, year 2?

In this question, it is first necessary to compute average net accounts receivable.
Average Net Accounts Receivable = [Beginning Net Accounts Receivable ($130,000 – $40,000 = $90,000) + Ending Net Accounts Receivable ($100,000 – $20,000 = $80,000)]/2 = ($90,000 + $80,000 = $170,000)/2 = $85,000
Accounts Receivable Turnover = $400,000/$85,000 = 4.705

[RB]

JiJi – to your first question:

What program are you using? And what does the answer state?

I hate to say it but I can’t answer this as is because:
We don’t know if that $10 discount is already incorporated into the $200 sales or not (IE, we may need to remove it or may not need to)

And it doesn’t say if AR beginning and ending are net amounts or not, if they are net then the allowance amount is included already and a distractor, if not, is that allowance the same at beginning and ending? At which point we would have average net receivables of ( (100-20) + (150-20) )/2 = (210/2) = 115

Maybe it was lost in translation but you need to read each problem carefully because SOMETHING in the problem should give a clue to those factors, and there’s nothing here to give that.

Your second question I can answer:

Net credit sales will be less returns / discounts, but is not itself reduced by any allowances. We sold 400K on credit, if we expect to write off 20k of that we’ll create an allowance for doubtful accounts for the $20K which reduces our net RECEIVABLE balance but NOT our sales. We sold 400k on credit, so that’s our credit sales (only reduced by returns or specific discounts that we gave up front, like we discounted it by 3%, that would potentially reduce our credit sales total because its an up front discount).

[meriden203]

Can someone help me please?
When attempting to decide whether to make or buy a product, how would you consider this scenario:
If the company buys the product and they rent out the factory space for $200, is it deducted from buying cost?
I get confused with this type of scenario.

Another question I have is about shipping and handling fees for make or buy scenarios. For a buy decision, do you include shipping and handling cost again? (it’s variable cost for a make decision and I think if you buy, you still have these costs again)
Thank you so much for your help

[rencpa]

@Jennifer… Hope I am not too late. GOOD LUCK TODAY!

[jiji]

Thank you very much RB for answering my question! Main concern was about ADA not subtracted from credit sales.

[rencpa]

I see I missed a lot here. Will catch up later. Thank you RB for “teaching”

[rencpa]

Hi jiji,

Mind sharing the answer with the rest of us. Actually, I just spent time calculating the AR Turnover and would like to confirm or correct my answer.

Thanks!

[rencpa]

@Ana, take a look around. RB did a great job with Variances (and explained HOW to study them).

[Abdulmajid]

Jennifer, how is it going? hopefully well done

[Abdulmajid]

Top CPA Exam Performers

Check out this link guys! impressive
that give some motivation

Don't we have one of those guys with us in this forum here? 🙂

[Author]

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