[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

[FAR_WARS]

I am going to stop doing MCQs and start rewriting notes/formulas/mnemonics one of these days. Maybe will make that the goal for the weekend.

FAR- 80
BEC- 75
AUD- 78
REG- ?

[monikernc]

Payaza, did you see my explanation to your last question last night?

Fyi: brainscape locked me out of my flashcards.

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

[monikernc]

Enert Inc.'s current capital structure is shown as follows. This structure is optimal, and the company wishes to maintain it.

Debt 25%
Preferred equity 5%
Common equity 70%
Enert's management is planning to build a $75 million facility that will be financed according to this desired capital structure. There is currently $15 million of cash that is available for capital expansion. The percentage of the $75 million that will come from a new issue of common stock is:

A.
52.50%.

B.
56.25%.

C.
70.00%.

D.
56.00%

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

[FAR_WARS]

D. 42/75= 56%

FAR- 80
BEC- 75
AUD- 78
REG- ?

[MaLoTu]

I got D

75M-15M=60M*.7=42M/75M=56%

[Anonymous]

I got 56% too, but it is BEC so….

Btw eesti's post made my night

[FAR_WARS]

An organization offers its customers credit terms of 5/10 net 20. One-third of the customers take the cash discount and the remaining customers pay on day 20. On average, 20 units are sold per day, priced at $10,000 each. The rate of sales is uniform throughout the year. Using a 360-day year, the organization has days’ sales outstanding in accounts receivable, to the nearest full day, of:

a. 13 days.
b. 15 days.
c. 17 days.
d. 20 days.

FAR- 80
BEC- 75
AUD- 78
REG- ?

[Anonymous]

is it C?

[FAR_WARS]

C is correct

FAR- 80
BEC- 75
AUD- 78
REG- ?

[FAR_WARS]

Troy Toys is a retailer operating in several cities.
The individual store managers deposit daily collections at a local bank in a noninterest-bearing checking account. Twice per week, the local bank issues a depository transfer check (DTC) to the central bank at headquarters. The controller of the company is considering using a wire transfer instead. The additional cost of each transfer would be $25; collections would be accelerated by two days; and the annual interest rate paid by the central bank is 7.2% (0.02% per day). At what amount of dollars transferred would it be economically feasible to use a wire transfer instead of the DTC? Assume a 360-day year.

a. It would never be economically feasible.
b. $125,000 or above.
c. Any amount greater than $173.
d. Any amount greater than $62,500.

FAR- 80
BEC- 75
AUD- 78
REG- ?

[Anonymous]

Is it C?

[FAR_WARS]

remember that .04% = .0004

(d) The requirement is to determine the effect of changing from using a depository transfer check to using a wire transfer. The change is feasible if the interest savings offsets the increased costs. For a fee of $25, the firm gets
two extra days’ interest on the average transfer amount. By dividing the $25 fee by the interest rate for two days, .04%
(2 days × .02%), we get $62,500. Therefore, management should make the change if the average transfer is expected to be greater than $62,500. Answer (a) is incorrect because it is calculating assuming there is only a one-day decrease in float.

FAR- 80
BEC- 75
AUD- 78
REG- ?

[monikernc]

The answer is:

D.
56.00%.

To find the percentage that will come from a new stock issue, first assume that the $15 million available for capital expansion will be used. Then apply the 70% rate to the remaining $60 million. That results in $42 million, or 56% of the $75 million.

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

[Anonymous]

I used the annual rate. Boo.

[monikernc]

This one is extra special:

Wexford Co. has a subunit that reported the following data for Year 1:

Asset (investment) turnover: 1.5 times
Sales: $750,000
Return on sales: 8%
The imputed interest rate is 12%. What is the division residual income for Year 1?

A.
$60,000

B.
$30,000

C.
$20,000

D.
$0

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

[Author]

Replies