[jeff]

Welcome to the Q1 2016 CPA Exam Study Group for BEC.

Some BLITZ videos to help your exams: https://www.another71.com/ninja-blitz

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

[Simon Ag]

Hey guys first of all I want to wish you all the best of luck for this coming session of the business exam.
Secondly , I want your help in the following , I recently got my ninja test bank Mcqs after I got a 73 in the BEC exam in November. I previously studied with becker but the software was closed.

Moreover, I was doing this mcq and found that they are really good however , I got a question where I think the answer marked as correct in NINJA MCQ is wrong , the question is :

XYZ Company gets a $100,000 revolving credit agreement from the Last National Bank. The 10% interest is to be paid on a discount basis and XYZ is required to maintain $10,000 more in its non-interest bearing account than it ordinarily would. The effective annual interest cost is:

A.
10.0%.

Incorrect B.
11.1%.

C.
12.5%.

D.
20.0%.
I answered it B , as we learned previously from becker , 10% times $100,000 divided by ($100,000-$10,000)

However, on Ninja the explanation was :
With a compensating balance of $10,000 for a loan of $100,000 at 10%, discounted:

Effective interest = Interest paid / Usable funds
= (10% x $100,000) / ($100,000 – $10,000 – $10,000)
= $10,000 / $80,000
= .125 or 12.5%
Usable funds = Loan amount – discounted interest – compensating balance

Please Advise
Regards
S

[monikernc]

You have to include the compensating balance when it is a condition for the loan. The ninja answer and explanation is correct.

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[RunningRach]

Question for the group – I took BEC end of Nov and failed with a 68. My exam was very hard….had lots of calculations but I felt very good about it. I knew the formulas and I never felt like I struggled with anything except I screwed up on the COSO/ERM definitions, but I felt great about everything else. Imagine my disappointment when I got the 68.

I am going to retake BEC before moving forward. I'm hoping to retake the exam by the end of January. I don't know whether I should wait to find out my results before moving on to Audit (which I was hoping to take end of February). I don't want to waste time because I would love to pass all the sections before the July changes kick in. What is the strategy that most of you do? Do you wait and see your results or do you move forward and study another section in the mean time?

Thanks in advance!

B-11/29/2015 68, 2/12/2016 82!!
A-10/23/2015 66, 4/18/2016 75!!
R-6/8/2016
F-8/7/2015 77!!

[ITSTIMETOPASS]

In order to increase production capacity, Gunning Industries is considering replacing an existing production
machine INith a new technologically improved machine effecti\e January 1 , Year 1 . The follOlNing information is
being considered by Gunning Industries.

• The new machine \o\()uld be purchased for $160,000 in cash. Shipping, installation, and testing \o\()uld cost
an additional $30,000.
• The new machine is expected to increase annual sales by 20,000 units at a sales price of $40 per unit.
Incremental operating costs are comprised of $30 per unit in ..a. riable costs and total fixed costs of $40,000
per year.
• The imestment in the new machine will require an immediate increase in working capital of $35,000.
• Gunning uses straight·line depreciation for financial reporting and tax reporting purposes. The new machine
has an estimated useful life of five years and zero sal..a. ge wlue.
• Gunning is subject to a 40 percent corporate income tax rate.

Gunning uses the net present …alue method to analyze imestments and will employ the foliOlNing factors and
rates.

Gunning Industries' discounted annual depreciation tax shield for Year 1 \o\()uld be:
•. $16,762
b. 520,725
c. $13,817
d. $1 5,200

Explanation
Choice “c” is correct. $13,617 discounted annual depreciation tax shield for Year 1 .

So it said that in order to calculate the depreciation expense, calculate the initial CF outflow in year 1. I'm wondering why they only used the cost of $190k (160k +30k) but why didnt they add the increase in working capital. The formula in Becker says that the formula for Net Cash Outflow for New PPE =Initial Price + Shipping + Installation + Increase in Working Capital – Cash Proceeds on Sale of Old Asset

AUD: PASSED!
REG: Q4 2015
FAR:
BEC:

[monikernc]

i feel so alone out here.
had 5 days for holiday and family far away so i have been able to finish first pass at ninja mcq's. went through section by section and did new questions. now i start my missed last time going section by section until 100% in all to hit review stage. hope to get that done by thursday night so hard review starts with 3 day holiday weekend.
BEC is tough because there is no way to build momentum. the topics constantly change! so slow and steady will win this race. i hope!
jan 18 is coming!

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[miamigirl]

I'm scheduled to to sit on Jan 7, and it's approaching way to fast for my liking. I hope to hit review by at least this Thursday, but so far I'm on my first time through the material.

REG 86
BEC 77
FAR 5/31/16
AUD 7/6/16

[If I can, u can too!]

Hi moniker, my holiday has been good, more relaxing time than study although I did put in enough time. I see you've been studying hard during the holiday time. You will do just fine!

CHEERS!

Licensed CPA since Apr 16
Order in sequence of passing
FAR-71,71,79
BEC-80
REG-72,77
AUD-56,72,72,72,80! Thank you, thank you, thank you Lord!
FAR/BEC/AUD: Becker & Yaeger lectures (Wiley & Ninja MCQs). REG: Becker lectures (Ninja MCQs).

[Blue.auditor]

I am taking the exam on February 1st.
I heard that studying for BEC is easy… but the exam is really difficult ! Is that true?

I have finished watching all lectures of Becker and done all homework, except for chapter 6.
I found them easy, but I am still worried about the exam.

FAR 90 - 11/16/2015
BEC 81 - 2/14/2016
REG 87 - 5/23/2016
AUD - 8/8/2016

[kmhizelb]

does anyone know what lecture/MCQ I should be using to sit in Q1 of 2016? I am using becker and studying with the v1.2 lecture/homework but not sure if I should still be using v1.1?

[dess213]

@Blue.Auditor, I heard BEC is the easiest (and I use the term “easiest” very lightly) of them. I am finding that FAR was way easier for me; there was a general structure and kind of a snowball effect that builds. These topics are just so broad and all over the place and I'm struggling. I can't wait for this hell to be over.

FAR-83
AUD-90
BEC-83
REG-80

I'M DONE!!

[MissMorrisa]

Struggling with CVP Analysis/Forecasting & Projection… It's not even hard these becker questions are just tripping me up. I'm at around 60%…writing out the answers I get wrong. A lot of writing

~Work in Progress -JJ

AUD - 80 (May 2015)
REG - 79 (August 2015)
FAR - 85 (November 2015)
BEC - 84 (February 2016)

[mitchmatch]

MissMorrisa, totally agree, im using Beckers as well, and chapter 2 is just nuts. Every question is very long, a ton of distractor information, its not real.

FAR-76 First attempt.
AUD-79 First attempt.
REG-79 First attempt.
BEC-79 First attempt.

Done!

BECKERS

[Hermit]

Hi Everyone,

So I am struggling quite a bit with BEC. I've taken it twice and got 66 on both attempts. The first time I took it I used Becker and went through the problems twice and ignored studying the essays. Second time taking it, I slightly changed up my strategy and made my own notes for each chapter and still got a 66. Both of these exams I was weak in MCQ. I'm thinking to switch to Roger, any other ideas??? I really don't want to fail it third time around when I only have 12 months to pass 3 exams and working in a public accounting firm…

F: Passed
A: TBD
R: Jan
B: 66, 66

[If I can, u can too!]

@Hermit try ninja MCQ. my lecture sources were yaeger and becker and i solved about 1000 questions on ninja and passed it on the first try. memorize all formulas and do lots of MCQs. ninja MCQ is pretty cheap too (3 month access-$40 with a discount code). gl!

Licensed CPA since Apr 16
Order in sequence of passing
FAR-71,71,79
BEC-80
REG-72,77
AUD-56,72,72,72,80! Thank you, thank you, thank you Lord!
FAR/BEC/AUD: Becker & Yaeger lectures (Wiley & Ninja MCQs). REG: Becker lectures (Ninja MCQs).

[Mashukzzz]

Hey guys, I don't understand why in this question 1200 is added to the numerator and not subtracted from the proceeds (denominator), like we would normally do. I researched the forum, found this link and i still don't understand the explanation. Maybe someone can explain without using the sales tax example 🙂

https://www.another71.com/cpa-exam-forum/topic/effective-cost-of-loan-question

Here is the problem:

Corbin Inc. can issue three-month commercial paper with a face value of $1,000,000 for $980,000. Transaction costs would be $1,200. The effective annualized percentage cost of the financing, based on a 360-day year, would be:

a. 8.65%
b. 8.48%
c. 2.16%
d. 8.00%

Explanation

Choice “a” is correct. The cost to issue the commercial paper is the $20,000 original issue discount ($1 million − $980,000), plus transaction costs of $1,200 for a total of $21,200. Therefore, it costs $21,200 to borrow $980,000 for 3 months. The 3-month effective periodic percentage cost is 2.16% ($21,200 / $980,000).
The effective annualized percentage cost is approximately 8.65% (2.16% × 4).
Choices “c”, “b”, and “d” are incorrect, per the above calculation.

Thank you and Happy New Year to everyone

REG - 91 on 01/21/15
FAR - 87 on 05/30/15
BEC - 88 on 01/04/16
AUD - 96 on 10/16/15

DONE

[Author]

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