Dream Big--It All Starts with a Dream

Lesson 31

From: Joe


(1) - I know a lot of you have watched my recent "Last Lecture" on YouTube (www.youtube.com/user/UniversityofRichmond). In that lecture, I talk about having a dream. I urge the audience to have a big dream and then to go for it. Don't shoot for mediocre: DREAM BIG. I use, as an example, a former student of mine who set out to be the youngest person in history to climb the tallest mountain in each of the seven continents (known as "the Seven Summits").

What a dream!! Can you imagine? He was about 20 and set out to climb Everest, Kilimanjaro, Elbrus, and all the rest. Win, lose, or draw he tried something that he could talk about for the rest of his life.

I personally believe that you need to have dreams. And, those dreams need to be BIG, dreams that are going to stretch you and make you a better person. I honestly think that it is very difficult to accomplish much in this life without some dreams.

I once dreamed of writing a textbook and I have now had the number one selling Advanced Accounting in the country for quite a number of years.

I once dreamed of starting a CPA Exam review course and I have now started three different programs that have all been successful.

I once dreamed of being a great college teacher and I was named the Virginia Professor of the Year in 2007.

I once dreamed of passing the CPA Exam and I managed to pass the whole thing at one time.

It all starts with a dream. Okay, I have had a number of dreams that I didn't manage to achieve. Life just works like that. You don't win them all. No one ever expects to win them all. But, I am convinced that you are never going to get anywhere in this life without serious dreams.

Passing the CPA Exam starts with a dream. For some, it is just a casual dream "if they will give me 75 points, I'd kind of like to pass." For many others, it is an absolutely serious dream "I'm willing to work as hard as I can to pass that CPA Exam. I want it to help my career and I want it to show myself that I'm as good as anyone. I WANT TO PASS THE CPA EXAM."

How BIG is your dream of passing the CPA Exam?
--If the dream is not very big, it is hard to do the work necessary to pass.
--If the dream is not very big, it is easy to get distracted from studying-night after night.
--If the dream is not very big, it is hard to stay on track when things get tough.
--If the dream is not very big, it is easy to give up when you have a bad day.

Probably ten times a day, you face a choice: do I study for the CPA Exam or do I do something else? How you answer that question probably tells whether you will be successful. How you answer that question probably depends on whether passing the CPA Exam is a true dream and not just a casual desire.

I sometimes think that once people get involved with all of the studying, they lose track of their dreams. Don't ever lose sight of your dream.

If you are tired and beginning to struggle, take some time off and have a serious talk with yourself. What was your dream when you first began? Were you serious about that dream or were you just pretending? Did you seriously want to pass or was it just a whim?

Keeping that dream first and foremost, right in front of you, is always a good strategy from the first day until the last. It is easy to get tired; it is easy to get discouraged. It is easy to choose to do something else. But like climbing a tall mountain, having YOUR dream squarely out in front of you can keep pushing you forward.


Okay, stop for a second. I don't want these email lessons to go in one ear and out the other. I'm not writing these to amuse me.

Take a sheet of paper and start writing down exactly why you want to pass the CPA Exam. Everyone has different reason. What is yours? List out as many as you can. Why is passing the CPA Exam a dream of yours? Don't give me vague reasons-be as specific and as honest as you can. List out all the reasons that apply to you. Then put that list in order of importance. Make sure to identify the number one reason why you dream of passing the CPA Exam. That needs to be constantly out in front. Type up the list and place a copy or two in the areas where you typically study. Make sure to put the list in a place where you can see it every day. Don't take for granted that you'll remember your dreams. Put them right in front of you.

Keeping that list visible will help you to push forward toward that goal.

You can do it.


(2) - If you have not seen my "Last Lecture," go to www.YouTube.com and type in Joe Hoyle at University of Richmond and it should pop up. You'll learn about Dreams and a number of other things that were on my mind that evening.


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(4) - My students here at the University are in their last week of the semester. They have worked incredibly hard this semester. However, I noticed today in class that they had begun to slack off. Suddenly, you could just tell that they were NOT putting out the same energy level as previously. They were slowing down like they were stuck in molasses.

That always concerns me. I don't mind people getting some rest (in fact, in any CPA Review, I think you should schedule in one or two break days every week). I do mind people slowing down. Taking a break and slowing down are radically different.

Assume you are running a mile race or a 10K. You run the race and you are 100 yards from the finish line and you have a chance to win. Would you slow down? Of course NOT, that is ridiculous. The fact that you were getting close to a victory would spur you on and raise your energy levels. Almost without exception you would run the last 100 yards faster than you ran the first 100 yards. The excitement at the end will kick in and raise your adrenaline levels so you can accomplish more than you expected.

However, on the CPA Exam, the attitude seems to be exactly the opposite. If a person works hard and gets close to the finish line, there is a tendency to moan, complain, whine, feel self-pity, fuss, and just generally feel an obsessive need to slow way down.

It may be human nature but THAT MAKES NO SENSE.

When you are getting close to the finish, then is when you should be getting excited. That is when the thrill of possible victory should push you to work even harder.

IT IS ALL IN YOUR MIND.

You can tell yourself, I'm close to the finish, I'm tired, I'm going to slow down or quit.

Or

You can tell yourself, I'm close to the finish, I'm tired, but I really want to win so I'm going to keep on pushing myself until the very end.

That is clearly up to you. I do know you are tired. I have no argument with that. If you need to, take a break-get away from it all for a day or two.

It is your response that is important. You cannot blame that response on anyone else. Your response to being tired will either

(a) slow you down
Or
(b) speed you up.

That is up to YOU.


(5) - Practice Problems - See if you can work each of these in order to add one extra point to your scores.

FAR - as usual, this came from yesterday's intermediate accounting class.

The Sain Company has 100,000 shares of common stock on January 1, Year One but issued a 20 percent stock dividend on July 1 of that year. Cash dividends of $80,000 were paid on the common stock shares during the year. The company also had 30,000 shares of $100 preferred stock paying a 4 percent per year cumulative dividend. This year the company reported net income of $500,000. What should be reported as earnings per share? (round to the nearest penny)

A - $2.50
B - $2.73
C - $3.17
D - $3.45

Answer is C

Earnings per share is a common stock computation. The earnings figure is the net income of the company after preferred stock dividends have been removed to arrive at the residual number left over for the common stockholders. The preferred stock cash dividend is $100 times 4 percent or $4 per share times 30,000 shares or $120,000. The income for common stock is the $500,000 reported total less $120,000 distributed to preferred stock or $380,000. This amount is then divided by the weighted-average number of shares. A stock dividend or stock split is not the same as the issuance of new shares but rather is a division of old shares. Thus, for this computation, the previous shares (100,000 shares on 1/1) are assumed to now include the results of the division. Because of the 20 percent stock dividend, the 100,000 shares have literally become 120,000 shares. Those 120,000 are said to exist from the original January 1 date so the common shares for that year are 120,000 and
earnings per share is $380,000 divided by 120,000 shares or $3.17.


Regulation

For the current year, a partnership has sales revenue of $500,000, cost of goods sold of $300,000, capital gains of $60,000, salary expenses of $120,000, and charitable contributions of $30,000. If there are two equal partners, what does each report of their separate income tax returns?

A - Partnership income of $40,000, capital gains of $30,000, and charitable contributions of $15,000.
B - Partnership income of $25,000 and capital gain of $30,000.
C - Partnership income of $55,000
D - Partnership income of $70,000 and charitable contributions of $15,000

Answer is A

In a partnership, certain income and expense items (including capital gains and charitable contributions) are passed through directly to the partner's own individual tax return. All other items (such as revenues, cost of goods sold, and other expenses such as salary expense) are netted together to form the basic partnership income that is also allocated to the separate partners based on the appropriate ratio which, in this case, was 50-50.


Auditing and Attestation

One of the components of internal control that an independent auditor must come to understand about each audit client is "information and communication." What is meant by this term?

A - The ability of the management of the company to communicate its priorities to the appropriate staff levels within the organization.
B - The ability of the accounting system to generate reliable information and convey it in a timely manner to those parties within the organization that need it.
C - The ability of employees in a company to warn the independent auditor of fraudulent actions within the organization.
D - The ability of the internal auditor to communicate information about the various systems to people within the organization at an appropriate level of authority.

Answer is B

Internal control includes any policies and procedures within the company designed to ensure that the accounting systems are functioning effectively as designed by the management of the company. One general goal is to make sure that the information produced by the accounting system is reliable and reaches the correct party in time to be used in making appropriate decisions. In looking at a particular system and its internal control, the auditor evaluates the ability to generate information and then communicate it to the parties who can make use of it.


BEC

A company sells widgets for $100 each and demand is10,000 units per year. The company is thinking of raising the price to $102. Which of the following statements is true?

A - If 10,000 units are now demanded by customers, demand is said to be elastic.
B - If 9,900 units are now demanded by customers, demand is said to be inelastic.
C - If 9,800 units are now demanded by customers, demand is said to be inelastic.
D - If 9,700 units are now demanded by customers, demand is said to be inelastic.

Answer is B.

The price of the goods has gone up 2 percent ($2/$100). The fall in demand is 0 (10,000 units), 1 percent (9,900 units), 2 percent (9,800 units), or 3 percent (9,700 units). Demand elasticity is found by taking the change in quantity demand and dividing it by the change in price. If the ratio is greater than 1, demand is said to be elastic (people move to other products to avoid the increase). If the ratio is less than 1, demand is inelastic (people stick with the product despite the rise in prices). If the ratio is 1, demand is unitary. Since the price went up 2 percent, any drop of more than 2 percent gives a ratio of more than one and demand is elastic. Since the price went up 2 percent, any drop of less than 2 percent gives a ratio of less than one and demand is inelastic. (A) is less than 2 percent so the ratio is less than one and that is inelastic. (C) is exactly 2 percent so that is unitary. (D) is more than 2 percent which gives a ratio of more than one
and demand is elastic. (B) is the answer because demand fell only 1 percent which makes the ratio 1/2 or less than 1. Demand is inelastic; few people switched to other products despite the increase in price.


"You learn you can do your best even when it's hard, even when you're tired and maybe hurting a little bit. It feels good to show some courage."
Joe Namath


Have a great week - DREAM BIG!!!


Joe Hoyle
Co-Founder
CPA Review For FREE