[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

[Plymuff]

Any idea folks … I have my BEC that expired yesterday (or was supposed to). My hope was to retake it first week of January 2017, but the system is only allowing me to pay for REG which would have been my last one. Anyone encountered something like this why the system won't allow me to pay (or do I have to wait a little bit?

AUD - May 2016
BEC - Passed
FAR - Passed
REG

Success is how high you bounce when you hit bottom

[Theodore]

@plymuff I think you have to wait a little bit. Can't remember too well, but i think the same thing happened to my ex-coworker.

Taking this section on Monday. I truly do not know what to expect nor do I know how I feel about it. it is more of a Blah feeling. Been scoring in the 80's on the progress tests, so I hope that's a good thing and that this is the last time I sit for one of these exams. So sick of studying for a straight year and a half.

FAR: 66, 76!
REG: 76!
AUD: 72, 9/7/2016
BEC: TBA

Don't Stop When You Are Tired, Stop When You Are Done.

[jms10101]

@Rosy0407

I am there with you. I am taking my BEC Monday and I still have Practice Test 2 to complete (Becker). I did well on my first test. I have also been studying for a year and a half and I am tired too. I have taken to reviewing flashcards with formulas and ratios. I figure that the concepts are there in my head or not. The numbers take more review to keep into short term memory. The long term memory does not work with that.

I will review cards and take practice exam 2 tomorrow. If I have time after the review of the practice test then maybe a couple of progress tests but that will be it.

[Theodore]

At least you're on the review stage. I am too, but I still need to review chp. 6 which will happen tomorrow. Progress tests help with memory retention even if it's just for exam day lol. I gave up on the practice tests it seemed like they were just a waste of time. At least for me. I did it for FAR and REG and didn't need them for AUD and hopefully not for this one either.

FAR: 66, 76!
REG: 76!
AUD: 72, 9/7/2016
BEC: TBA

Don't Stop When You Are Tired, Stop When You Are Done.

[jms10101]

The important thing is to find a way that works best for you. We are both almost done. What a long journey it has been. I wish you good fortune on your exam. Tell me how it went, I would be curious to know!

[cpa007]

I keep tripping on this question.
Why WACC is 10% not 9%? When i calculate it is coming 9%.

Zig Corp. provides the following information:

Pretax operating profit $300,000,000
Tax rate 40%
Capital used to generate profits 50% debt, 50% equity $1,200,000,000
Cost of equity 15%
Cost of debt 5%

What of the following represents Zig's year-end economic value added amount?
ANS:
The economic value added amount (EVA) is calculated by multiplying the capital employed at the beginning of the period by the difference between the return on capital employed (RCOE) and the weighted average cost of capital (WACC). Since a company is worth its book value if the RCOE is equal to its WACC, the positive difference between the two would be the percentage by which the value of the business is increased.

EVA is the income earned in excess of the normal rate of return represented by the WACC. Since the debt and equity proportions are each 50%, the WACC is 10% ((15% + 5%) ÷ 2).

Capital $1,200,000,000
WACC x 0.10
Normal return $ 120,000,000
Net income after tax ($300,000,000 x 0.60) 180,000,000
EVA ($180,000,000 – $120,000,000) $ 60,000,000

[Anonymous]

Good Afternoon Study Buddies,

The following question has me stumped and I believe my brain has shut down temorarily after all of this studying. Please help.

Management would like to calculate return on investment (ROI) for the current year. The following information is available:

Operating assets at the end of the year $6,600,000
Operating assets at the beginning of the year $5,400,000
Sales $1,150,000
Operating expenses $550,000

What percentage amount is the ROI?

I'm tired of operating in fear and mediocrity. It's time to try. It's time to do. It's time to go.

[cpa007]

@KGREEN 37

Operating assets at the end of the year $6,600,000
Operating assets at the beginning of the year $5,400,000
Sales $1,150,000
Operating expenses $550,000

What percentage amount is the ROI? NI/Av Total assets or Invested capital

NI =Sales $1,150,000 – Operating expenses $550,000 =600,000

AV Total Assets =BEG 6600000 + END 5400000 /2 =6,000,000

ROI? NI/Av Total assets or Invested capital= 600,000/6,000,000 = 0.10 or 10%
HOPE i am right please correct me if i am wrong.

Take a break this is easy Q, if you are doing Q wrong you need a break.
Note :there is on tax given in the Q to cal NI , otherwise cal NI net of tax amount.

[cpa007]

Please some one explain me this Q.
A department adds material at the beginning of a process and identifies defective units when the process is 40% complete. At the beginning of the period, there was no work-in-process. At the end of the period, the number of work-in-process units equaled the number of units transferred to finished goods. If all units in ending work-in-process were 66-2/3% complete, then ending work-in-process should be allocated as follows:

Correct A.
50% of all normal defective unit costs

B.
40% of all normal defective unit costs

C.
50% of the material costs and 40% of the conversion costs of all normal defective unit costs

D.
None of the normal defective unit costs

[Anonymous]

cpa007, thanks for the assist. See the thing is I was able to calculate the problem right before posting, however this (NI/Avg. total assets) is the formula for ROA in my review book. ROI is NI/total assets or average invested capital. Do you see why it would be confusing?

I'm tired of operating in fear and mediocrity. It's time to try. It's time to do. It's time to go.

[Theodore]

Kgreen37 I have that ROI is either Income/Invested capital OR Profit Margin (NI.Sales) x Investment turnover (sales/ave. assets) in short the second formula can turn into NI/Ave. Assets which should give you the same %. It is similar to ROA (NI/Ave. Assets) I guess it all depends on how they word the question and what info they give you. If they give you invested capital then use that, if not use ave. assets for ROI..

@cpa007 your questions are worrying me now. :/

@jms thank you! hopefully we're done after tomorrow. Best of luck to you too!

FAR: 66, 76!
REG: 76!
AUD: 72, 9/7/2016
BEC: TBA

Don't Stop When You Are Tired, Stop When You Are Done.

[cpa007]

@Rosy0407
Sorry i am making you feel this way. I am myself trying to learn as much as i can. This stuff is not easy . I really hope we all pass this beast.


@KGREEN37 these formulas are confusing i totally agree with you.
All these Q,s are from NINJA MC.
With this Q ..i want to know why they are not using wacc debt net of tax.They are just taking Average..the debt and equity proportions are each 50%, the WACC is 10% ((15% + 5%) ÷ 2).

Zig Corp. provides the following information:

Pretax operating profit $300,000,000
Tax rate 40%
Capital used to generate profits 50% debt, 50% equity $1,200,000,000
Cost of equity 15%
Cost of debt 5%

What of the following represents Zig’s year-end economic value added?
EVA= NOPAT – cost of financing
cost of financing(Total Assets- Curr Lia)* wacc

[Anonymous]

First time attempting BEC… Sections 2 and 3 of Becker are freaking me out. Should I be worried? Is Gleim better?

[cpa007]

@crimsontyde17 BEC is complete crap shot. It takes a while to grasp this material. If you don't understand something go to YouTube there are some good videos on variance, cost accounting. First 2 chapters of Becker are very important to understand. Actually everything is important lol.I feel becker Q,s are too lengthy though. Hang in there just rinse and repeat . Gook luck!

[Anonymous]

Thanks! @cpa007. I can say that logging in made me want to put in another 2 hrs.

[Author]

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