[jeff]

Welcome to the Q2 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

[Pony Boy]

How far along in the studying are you? I am trying to see if I am on a good pace.

REG (02/2016)- PASS
BEC (04/2016)- PASS
FAR (06/2016)- PASS
AUD (08/2016)-

"Stay Gold, PonyBoy, Stay Gold"

[Bear-Bear]

40% done. Woohoo! I'm slightly ahead of pace. Anyone else using CPAExcel?

[MaLoTu]

I want to test on 4/4 or 4/5 and I am 70% through the book/MCQ. I will be 100% done by Sunday and then I will dedicate the next week solely to MCQ.

[MaLoTu]

Might I add, Angie Brown, B2 lecture = unbearable!

[Bear-Bear]

@MaLoTu – I think your lecturer and my lecturer should go bowling together

[csvirk]

Kore Industries is analyzing a capital investment proposal for new equipment to produce a product over the next eight years. The analyst is attempting to determine the appropriate “end-of-life” cash flows for the analysis. At the end of eight years, the equipment must be removed from the plant and will have a net book value of zero, a tax basis of $75,000, a cost to remove of $40,000, and scrap salvage value of $10,000. Kore's effective tax rate is 40%. What is the appropriate “end-of-life” cash flow related to these items that should be used in the analysis?

What do they mean by tax basis of 7500 and how should we treat tax basis to solve this question? Thanks for the help.

FAR: 71, 77!
AUD: 69, 80
BEC: 72
REG: 84

[csvirk]

If the average age of inventory is 90 days, the average age of accounts payable is 60 days, and the average age of accounts receivable is 65 days, the number of days in the cash flow cycle is:

I got the right answer of 95 (90+65-65). But I didn't understand this question. How to understand the concept of this question? Thanks for help

FAR: 71, 77!
AUD: 69, 80
BEC: 72
REG: 84

[MaLoTu]

what material are you using csvirk? I am not to the financial management part of my review yet, so I can only go off of what I remember. I think when they refer to tax basis for the machinery, it is probably the amount they originally purchased it for, so it is the price they are using for depreciation.

The first problem looks like it is asking for the cash flow related to capital budgeting, but it doesn't give enough information … You determine TYCF as SP (10000?) +decrease in WC (not given) – gain or + loss = net inflow(outflow)

The final year has 2 inflows because there is still a final year of operating cash flows…

am I way off base?!

Ill have to get back to you on the other one.

[monikernc]

Csvirk. A/P is cash outflow, A/R is cash inflow, inventory is what you are both purchasing and selling. If you purchase inventory and it is on avg 90 days old when you sell it and you pay for it on avg in 60 days, and your customers pay on avg in 65 days, your cash is churning (inflows versus outflows) throughout that 95 day period. Notice also that doing the calculation assets (inflows) are added and liabilities (outflows) are subtracted. The 95 days is the avg period of time it takes to convert inventory to cash flow and is a measure of liquidity.

this explains it better than i did: https://www.investinganswers.com/financial-dictionary/financial-statement-analysis/cash-conversion-cycle-2539

see if this prior post to the Kore Industries question helps. https://www.another71.com/cpa-exam-forum/topic/tax-loss

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

[Bear-Bear]

Wow…Evaluation Techniques are no joke. Made it 50% of the way through the material without any challenge until now. Ick.

[MaLoTu]

@ Bear-Bear – what are the techniques … is that financial management? I have Becker and I don't recognize the terminology!

[JSThompson]

This week I signed up for my first CPA exam starting with BEC.
I'm on a very tight budget so I'm only using the Ninja MCQ and Notes for now.
My question is should I purchase the BEC Ninja book as a resource for topic areas I'm struggling on or go back through my college text books for more hands on examples?

2016 CPA Candidate

[MaLoTu]

@JS – I couldn't imagine doing this without a book … When are you testing? If you have the time to spare, you can see if your college texts work for you (then purchase the NINJA book if the answer is no). If you are on a time restraint, I would buy the NINJA book.

[Anonymous]

Ma Lo wish I could help with the WA and FIFO questions. These are the last chapters in my book and I have spent several hours trying to get the concepts down and I still can't seem to answer the questions right consistently. There's the EU part and then there's what costs to average into part. If someone has a clue about how to approach these problems it'd be much appreciated.

I'm doing all 1862 questions in Gleim as my final prep. Then reviewing what I got wrong over the last four days. Gleim has a lot of IT so that's a plus. COSO isn't so bad because I just took audit. Plus I can actually remember what the cube looks like. BTW any thoughts on how important COBIT 5 is?

[JSThompson]

Thanks for the advice about the book for BEC.
I just applied for the exam so I have to wait to get my NTS first so I have time now.

2016 CPA Candidate

[Author]

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