[jeff]

Welcome to the Q4 2016 CPA Exam Study Group for BEC.

If this is your first post in the study group – please post your target exam date (just the time frame to preserve your anonymity), and your past history with this exam (optional, of course).

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

[undeniabletwins2]

Hi All, I am by no means a first time user of this site, i am a work in progress. hoping to take BEC Nov for the second time. Last time in FEB i got a 60% MCQ killed me. TBS was a breeze.

Good luck everyone.

AUD - 58, 62, 56, OCT 2015
BEC - August 22,2015
FAR - TBD
REG - TBD

BECKER LIVE CLASSES, BECKER TEXTBOOKS,FINAL REVIEW, FLASHCARDS/NINJA MCQS, NOTES AND AUDIO/WILEY FOCUS NOTES.

IF U TRY AND U DONT SUCEED, TRY AND TRY AGAIN...GIVING UP IS NOT AN OPTION.

[struggler]

Ok, I get that. Thanks Michael!

[bronze5988]

@undeniabletwins2
How are you studying differently the second time around? I am also planning on retaking BEC at the end of November.
Also, did you study/pass different tests between Feb. and now?
thanks

[iamonloose]

I will be taking BEC in 4 hours but I still don't know the answer to the following questions:

The working capital financing policy that subjects the firm to the greatest risk of being unable to meet the firm’s maturing obligations is the policy that finances:

a. Fluctuating current assets with short-term debt

b. Permanent current assets with long-term debt

c. Permanent current assets with short-term debt

d. Fluctuating current assets with long-term debt

Why is A not the correct answer. Can someone please shed some light.

[Indiva]

Question:
I am scheduled to sit for BEC on 11/21. How do I use my time studyng effectively using Yaeger materials ( work full time and have 2 small children)? I have Audio, the book, and the video lectures. I am definitely a note taker. Do I read the chapters and take notes or is there additional value by watching the lectures? I also listen to the audio material. Thanks in advance fo rany feedback.

[ZeXaT]

I have Question:
Issuing common stock will increase a company financial leverage?

[struggler]

Can anyone explain how to solve this problem?

Southern Corp. has a debt-to-equity ratio of 1.75, and total assets of $275 million. Southern is considering issuing another $20 million of debt and another $20 million of equity. What will be Southern's debt-to-equity ratio after the issuance?

a.1.46
b.1.63
c.1.75
d.1.95

The answer is b.1.63

[Anonymous]

@struggler Use algebra to solve the problem. First look at the debt to equity ratio and solve for D.

Here's the ratio D/E = 1.75 and here's solving for D = 1.75E.

Plug that into your A = D + E equation and you get: 275,000,000 = 1.75E + E. Solving for E = 100,000,000. With that in mind: 275,000,000 = D + 100,000,000, D will have to equal 175,000,000

Last step: add the increase in debt of 20 million and equity of 20 million.

195,000,000/120,000,000 = 1.625 round to 1.63

[Anonymous]

Hitting BEC hard today as I hope to get back on track for the exam in November. Let's get some tough questions in here today (also don't put the answer directly under the question, put it at the very bottom of your post, I don't want to see it before I do the problem).

[jeff]

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

[Anonymous]

@Jeff the answer is C. 16,800 favorable calculated as follows:

AQ(SP – AP) => 11,200 ($20 – $18.50) = 16,800

[struggler]

Thanks BondVillain!

[Mike]

Immunizing a portfolio from interest rate risk by matching the duration of assets to the duration of liabilities might be ineffective and/or inappropriate because:

A. conventional duration strategies assume an upward-sloping yield curve.

B. immunization models are highly sensitive to adjustments for inflation.

C. duration matching is effective in immunizing portfolios from parallel shifts in the yield curve.

D. All of the answer choices are correct.

The answer is C. So here's a koan for you. If duration matching is ineffective then why is it effective?

I'm early on in BEC; I've seen all the Bisk videos and am now starting on MCQ and ran across this stumper. This is still 100 times easier than FAR, though.

[Anonymous]

@Michael, I came across this problem today as well. I think understand 99% of the logic in answers but this one is just a lil too obscure. “Parallel shifts in the yield curve”? WTF is that supposed to mean? Maybe Jeff can shed some light on it.

[hhung1485]

Clear Plus, Inc. manufactures and sells boxes of pocket protectors. The static master budget and the actual results for May are as follows

Actual. Static Budget
Unit sales. 12,000. 10,000

Sales. $132,000. $100,000
Variable costs of sales. 70,800. 60,000
Contribution margin. 61,200. 40,000

Fixed costs. 32,000. 30,000
Operating income. $29,200. $10,000

The operating income for Clear Plus, Inc. using a flexible budget for May is:
a. $19,000
b. $18,000
c. $16,000
d. $21,000

May someone explain this problem too me? I would really appreciate it.

the results are below. I am using Becker and the slides don't really explain the process to solve a problem like this.

12,000 units × $4/unit contribution margin = $ 48,000
Fixed costs (30,000)
Net income per flexible budget $ 18,000

FAR - 93
REG - TBD
BEC -
AUD -

[Author]

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