Congratulations on All Your Work in 2009

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December 22, 2009

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Congratulations on All Your Work in 2009

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Lesson 58

From: Joe


(1) – Happy Holidays!!! from all of us here at www.CPAreviewforFREE.com. We hope you have a great and wonderful holiday season and that 2010 turns out to be the very best year of your entire life. Go for it!!!

I am actually sitting here in Richmond looking out my window on most of the 15 inches of snow that we had this past week-end (which appears to be very intent on hanging around). It is amazing how much work you can get accomplished if you cannot get your car down your very steep driveway.


(2) – FACEBOOK - I just finished posting my 17th tip in my “30 tips in 30 days” program on Facebook. This one was on Joe’s own “Four C’s for Success on the CPA Exam.” If you are interested in signing up to get these, go to www.facebook.com and search for CPAreviewforFREE and sign up.


(3) – TEXTBOOK - I have written some over the past few months about my new textbook that will be coming out in just the next few days. It is a free on-line book. If you are a college student or a college professor and want to learn more, here is a story about my writing of this book.

news.richmond.edu/features/article/www/690/award-winning-accounting-professor-keeps-teaching-fresh-after-30-years.html

If you are interested in actual information about the textbook itself, you can go to (tell your teachers to have a look):

www.flatworldknowledge.com/printed-book/1638

I have poured three years of my life into that book – I’ll let you decide whether that was a good allocation of time or not.


(4) – UNSUBSCRIBE – If you should ever decide that you are ready to stop hearing from us, you can scroll to the bottom of this lesson (or any other email lesson) and click on the box and unsubscribe. We certainly love having you but we’ll leave it up to you as to how long you stick around (have you ever noticed that most emails hide the “unsubscribe message” so that you can barely find it – we want you to stay only as long as you want to).


(5) – WHO STUDIES THE MOST – We get weekly statistics about the traffic on our site. We typically have visitors from about 80 locations every week. The 50 states of the United States make up one location and then we get traffic from many other locations around the world. We always get extra information about the traffic from the top 10 locations each week. One of my habits is to look and see which of those top locations actually studies the most. For some reason, that seems interesting to me. I figure that indicates who is really most interested in learning the material and passing.

Last week, the winner was the Philippines. The average person from the Philippines stayed on www.CPAreviewforFREE.com for 39 minutes and 8 seconds each time they visited. That was following closely by Puerto Rico with an excellent 34 minutes and 28 seconds. The United States was a respectable 21 minutes and 51 seconds.

Okay, if you are not from one of those three locations, spend some extra time this week on the site so that you can get your area into our “who studies the most” designation.


(6) – SALUTE – I want to pause for a moment here as we near the end of 2009 to raise a salute to every single one of you who studied for the CPA Exam this year whether you have taken it yet or not. It takes an incredible amount of time, energy, and perseverance to get yourself ready for this exam. In some ways, it is like preparing for the Olympics. You should be very pleased about all that you have been able to accomplish this year. No one ever gets as much done as they would like but you took a good shot at it. Anyone can talk about preparing – you did it. I realize that the one and only goal is to pass the CPA Exam but I just have to tell you how pleased I am that you have worked so hard in 2009.

Whether you pass or fail, the CPA Exam is an incredible challenge. One of the hard parts is that so few people really understand how difficult it is – until you have done it, you cannot appreciate the amount of effort you have to expend to prepare. Well, I did that preparation myself and I do understand. So, I want to pass along my praise.. You have taken on a real challenge and you have not backed down. Good for you!!!!

One of my all-time favorite quotes comes from President Theodore Roosevelt. I was reminded of this quote because it was mentioned in Time magazine this week. I have used this quote often and it really does mirror my feelings. It applies to all of you who have worked to make yourselves better this year so that you can pass the CPA Exam.


From President Roosevelt: “The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again… who spends himself in a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who at the worst, if he fails, at least he fails while daring greatly.”

Strive valiantly, my friends.
This is a worthy cause.

What more could I possibly add?


(7) – PRACTICE

FAR

Company A buys Company B and pays $5 million more than the fair value of the identifiable assets and liabilities. The $5 million was recorded as Goodwill. Which of the following statements is true?

A – Goodwill is amortized to expense over 40 years.
B – The rules have changed so that goodwill is now expensed immediately.
C – Goodwill must be checked for impairment periodically and reduced if impaired.
D – Goodwill is amortized over an appropriate period of 40 years or less.


Answer is C

Goodwill is no longer amortized. It is recorded as an intangible asset on a consolidated balance sheet. This reported balance must then be checked periodically for possible impairment. If impaired, it is reduced and a loss recognized.


BEC

A company has seven divisions. The Blue Division is very slow at sending out invoices so that cash collections are delayed. The management of the Blue Division looks at the invoice systems operating within the other six divisions and discovers that the Green Division has the best practices in this area of the business. Therefore, where practical, they adopt some of these practices for use by the Blue Division. What is this process called?

A – Maximization of Time
B – Benchmarking
C – Quantum Time Theory
D – Hagler’s Theory of Routine Processes


Answer is B

Company officials should always be looking for better ways to do things so that their own organization is able to become more efficient on a continuous basis. Comparisons should be made between the way that activities are executed by the organization and the procedures carried out by others, in other divisions and even in other companies. The process of discovering weaknesses and using the results obtained from others to create improvement is known as benchmarking.


Auditing and Attestation

The Waynesboro Corporation has recently installed a new computer payroll processing program. Before the program is used to compute actual payroll checks for the employees, test data is going to be run through the computer to see how it would be processed. Which of the following is least likely to be tested in this manner?

A – Two checks requested for the same employee
B – A check requested for an employee who quit two months earlier.
C – A check requested for an employee working more than 60 hours per week.
D – A check requested for an employee paid an hourly rate of $12 per hour.


Answer is D

Test data hopes to verify that the computer will produce an error report where there is a problem (such as in A and B) or a potential problem (such as in C) that must be cleared before actual processing proceeds. The fact that some employees are paid hourly wages is not a problem and there is nothing suspicious about a rate of $12 per hour (roughly $24,000 per year).


Regulation

Jay Wilkinson serves as the host at a fancy restaurant in New Orleans. As such, he wears a nice jacket so that he has an appropriate professional look. However, he must pay $30 per week to have the jacket cleaned and looking nice. How much of the cleaning costs can he deduct as a miscellaneous itemized deduction on his income tax return?

A – Zero
B – 20 percent of the amount spent
C – 50 percent of the amount spent
D – 100 percent of the amount spent


Answer is A

If these costs were incurred as ordinary and necessary expenses of traveling away from home for the person’s business, profession, or job, they are deductible. However, this expense here was not during business travel and is, therefore, not deductible. Most employees are expected to wear clean clothes while at work but no deduction is allowed for that cleaning. The fact that it was a nice jacket worn at a fancy restaurant is not important to the tax laws.


Have a wonderful and happy holiday!!!
Hug, at least one person you love – in fact, hug a lot of people that you love.


Joe Hoyle

Co-Founder
CPA Review for FREE