Becoming a Champion

Becoming a Champion

From: Joe

(a) – I fully realize that our economic times are quite scary at the moment. I truly hope that everyone who gets these emails is doing okay financially. If you are like me, you are both mystified and a bit wary. I am confident that things are going to get better and that the economy will come back strong. However, we will all feel better when things start to look better. I just hope that you have not been facing truly difficult financial issues in the last couple of weeks.

I am old enough to have seen a number of economic ups and downs over the years. One thing that always happens in such times is that people get more interested in making their resumes look better. Makes perfectly good sense. One of the best ways to improve that resume is to add the letters C P A after your name. Whether you are in Walla Walla or Katmandu, those three letters mean something important.

So, if you know someone who is struggling with the economy at the moment, one recommendation is to take the CPA Exam and get it passed. Not a bad way to spend some time. Those three letters will put you ahead of the pack if you are looking for a new job or a promotion.

The problem, of course, is that CPA review can be extremely expensive. Today, people are not in position to shell out several thousand dollars for prep programs (especially mediocre programs). It’s a tough call: I need to pass versus I cannot afford to prepare.

But, wait a minute!!! CPA Review For FREE (www.CPAreviewforFREE.com) provides you with a full range of practice questions to allow you to prepare for the CPA Exam for FREE (“free” as in no cost). You can get those three important letters after your name and you can prepare for free. What a deal; what an opportunity.

Now is the perfect time to get started. Move to the head of the class: pass the CPA Exam.

I once had a friend who had years and years of experience in CPA Review give me some good advice: “Anyone who works 2,000 well-written questions and carefully studies the answers should be able to pass the CPA Exam.” I hate to tell you this but much of the huge amount of materials that other review courses provide is just to allow them to jack up the price and charge you so much money. I know it looks impressive but if your goal is to pass the exam all that material can be overkill. “Anyone who works 2,000 well-written questions and carefully studies the answers should be able to pass the CPA Exam.”


(b) – As always, thanks for forwarding our emails along. www.CPAreviewforFREE.com gets more and more visitors every week. Last week, for example, we had a 42 percent jump in the number of pages that were viewed over our previous high. 42 percent jump in one week!!! People are clearly discovering how well our questions and answers help them to prepare.


(1) – We all have heroes. One of mine has always been the legendary football coach Vince Lombardi, who became famous in the 60s for coaching the Green Bay Packers to a number of championships.

What I like about Lombardi is not that he won a lot of football games. Many people do that. Plus, after all, football is really just a game. What I really like was his attitude. He believed that every person was capable of winning if they simply prepared themselves in the proper way. In fact, he was probably best known as a coach who took average players and turned them into champions. What a wonderful thing to be remembered for.

Anyone can win if they have the best players. That is no trick; that is no challenge. The excitement comes from taking average people and pushing them to do their best. And, I have found, in my life, that when people really do their best, things go very well.

If you have read these emails for long (I have been doing them off and on now for over ten years), I have always held that everyone can pass the CPA Exam. That is not an idle statement. It takes work, it takes focus, it takes dedication, it takes desire, it takes sacrifice, it takes good materials, it takes hours, it takes confidence. But it can be done.

Work
Focus
Dedication
Desire
Sacrifice
Good Materials
Hours
Confidence

There is no reason, if you have those eight magic ingredients, that you cannot mix up a brew that will turn you into a CPA. The trouble is that people come to the table with only 3 or 4 and then decide that they are not good enough to be CPAs. Baloney!!! As Shakespeare so aptly says in Julius Caesar: “The fault, dear Brutus, is not in our stars, but in ourselves, that we are underlings.” When you have these eight, YOU can succeed at virtually anything you attempt. You really can leap tall buildings with a single bound.

So, where does this lead us?

--Make a plan. By when do you want to have the CPA Exam passed? Stop being random. Set a firm goal. Always start at the end and work backwards.
--Ask yourself what you need to accomplish to get to that goal. Be reasonable: working 28 hours per day is not going to work. If you read these emails, you know that I recommend 250-400 hours to pass all four parts of the exam. When are you going to spend those hours? What are you going to do in those hours?
--Once you have a plan in place, have an honest conversation with yourself and ask a couple of serious questions and give truthful answers.
Can I do this as currently set up? If not, go back and rearrange the schedule. There is no reason to get started doing something that you simply cannot do. That is a loser from the start. Create a plan that is doable and will turn you into a winner.
What will be my biggest obstacles? What can I do at the start to lessen the problems that those obstacles pose? You know yourself. What is really going to hold you back and how do you get around that? Don’t be naïve; understand your weaknesses and address them before they cause a problem.
Why do I want to do this? It is very important to have a clear understanding of why you are seeking to become a CPA. When times get tough and you get tired and sick of it, it is easy to quit if you don’t have a well defined purpose for the study.
Can I have the right attitude? If you go into your preparation thinking it is going to be the worst few months of your life, this journey can be miserable. It is hard to be successful when you are miserable. If you go into this thinking it will be an interesting mental challenge, everything gets easier. Trust me on that. How do you go about setting up a positive mental attitude?
How can I reward myself along the way? Most people are not used to performing long tasks without a break. You can just wear down and become completely inefficient. I am a big believer that taking breaks is good for you. You need to study well. Don’t study more than 3-4 days straight without a day off. Don’t study more than 90 minutes straight without a 15 minute break. During those breaks, think what you can do that will make you feel better. You want to use the breaks to refresh yourself. They don’t give you points for wearing out.
How can I make sure I believe in myself? We are all very aware of our failings. Every person has some concern that they are not good enough. How do you go about making sure that you have the confidence you need to succeed at such a challenging task? One answer is to do the work and realize how much stronger you are becoming as you move through the process. Step back and make an honest appraisal of all that you have accomplished. It is not where you start that counts but the progress that you make toward your goal that truly does matter.


I am not a huge baseball fan but I have been intrigued by the Tampa Bay team. They are playing Boston at the moment and I have no idea who will win. However, Tampa Bay did something that I always find interesting. In one year, they have gone from the worst record to the best record in their division. That is truly amazing.

How do you do something like that? You work hard, you believe in yourself, you spend time practicing to get better.

Face it; there are no real secrets to becoming successful. We all know what it takes.


(2)-Just a reminder. If you want or need to unsubscribe, just scroll to the bottom of this email lesson and you will find a link that pulls your name off our list. We are glad to have you with us but you are more than entitled to unsubscribe whenever you wish.


(3)-Let’s do some practice work. Here are a few new questions that I want to add to our database at www.CPAreviewforFREE.com. You will get a chance to practice on them before they hit our website.


Regulation

Mary, a single individual, has provided more than half of the support for the following three people. Her mother who lives in a nursing home and who earned $10,000 in social security and $2,000 in interest income. Her son who is 19 and a full-time student who received $20,000 in scholarship income. Her friend who is in the process of getting a divorce. She has no income and is not filing a joint return with her estranged husband. How many dependents can Mary include on her personal tax return?

A – Zero
B – One
C – Two
D – Three

Answer is D

The mother is a dependent because she earned such a low amount of income that was subject to taxation. The son is a dependent because he is under 24 and a full-time student so that the amount of income is not a factor. The friend is a dependent because she does not file a joint return. There are five basic rules for being a dependent and these individuals meet the specific rule that appears to be in question for them.


Financial Accounting

Ace Company buys inventory on December 18, Year One for 20,000 vilsecks, a foreign currency. On that day, one vilseck is worth $.24. At the end of Year One, the inventory is still held and the debt is not yet paid. On that date, one vilseck is worth $.25. Ace might be a foreign subsidiary that is being consolidated with a US parent company so that translation is appropriate. Ace might be a US company making a purchase from a foreign supplier so that a remeasurement is appropriate. What gain or loss is reported in each case at the end of Year One?

A – If this is a translation, there is a $200 gain. If this is a remeasurement, there is a $200 loss.
B – If this is a translation, there is no gain or loss. If this is a remeasurement, there is a $200 loss.
C – If this is a translation, there is no gain or loss. If this is a remeasurement, there is no gain or loss.
D – If this is a translation, there is a $200 gain. If this is a remeasurement, there is a $200 gain.

Answer is B

In the translation of a foreign subsidiary, all assets and liabilities are adjusted at year-end to the new exchange rate. Therefore, both balances at December 18 are equal to 20,000 times $.24 or $4,800. At December 31, both are translated at 20,000 times $.25 or $5,000. The $200 gain in the reported value of the inventory is offset by the $200 loss in the reported amount of the payable. In contrast, in the remeasurement of an individual transaction, only monetary assets and liabilities (cash, payables, receivables, and accounts reported at fair value) are adjusted to new exchange rates. Again, both balances at December 18 are equal to 20,000 times $.24 or $4,800. However, at December 31, only the payable is adjusted to 20,000 times $.25 or $5,000. The increase in the liability creates a $200 loss. The inventory remains at $4,800 for reporting purposes.


Auditing and Attestation

A company is talking with a local CPA about doing either a compilation or a review of its financial statements for the current period. Which of the following statements is true?

A – In a compilation, the CPA provides limited (sometimes referred to as negative) assurance.
B – For the most part, a compilation is limited to making inquiries and carrying out analytical procedures.
C – A review is a presentation of client information in the form of financial statements.
D – A review might well include a comparison of the results for the current period to anticipated numbers in a budget or forecast.

Answer is D

A review consists primarily of inquiry of company officials and the performance of analytical procedures. In this way, the CPA is able to provide limited assurance that nothing was noted that indicated the presence of any material modifications that needed to be made to be in conformity with generally accepted accounting principles. Comparing current figures to anticipated figures helps to highlight balances that do not appear to be correct or normal. In contrast a compilation is primarily the presentation of the client numbers in the form of financial statements with no assurance at all being given.


BEC

On January 1, Year One, a company spends $60,000 on an investment that will return $20,000 on each December 31 of Years One, Two, and Three as well as an additional $30,000 on December 31, Year Three. The company has a desired rate of return of 10 percent per year. The present value of $1 paid in three periods at a 10 percent rate of return is .751. The present value of an annuity due of $1 paid over three periods at a 10 percent rate of return is 2.736. The present value of an ordinary annuity of $1 paid over three periods at a 10 percent rate of return is 2.487. Which of the following statements is true?

A – The investment has a positive net present value of $ 7,590.
B – The investment has a positive net present value of $12,270.
C – The investment has a positive net present value of $16,860.
D – The investment has a positive net present value of $17,250.

Answer is B

A positive net present value indicates that the present value of the future cash flows determined based on a desired rate of return is higher than the cost of making the investment. These specific cash flows have a present value of $20,000 times 2.487 ($49,740) plus $30,000 times .751 ($22,530) for a total of $72,270. The first three payments are an ordinary annuity since they begin one period after the investment is bought. The cost of the investment is $60,000 so that the net present value is the excess $12,270. Investments with a positive net present value are viewed as good investments.


Have a great week. Do not let the roller coaster ride of the economy distract you from getting the points you need to pass the CPA Exam.


Joe Hoyle
Co-Founder
CPA Review For FREE