2013 FAR AICPA newly issued question

  • Creator
    Topic
  • April 18, 2013 at 7:27 pm #177163
    Anonymous
    Inactive

    The question below was issued by the AICPA for 2013, below is the pdf link to download the file, but unfortunately there is no explanation.

    https://www.becker.com/accounting/cpaexamreview/students/2013_AICPA_FAR_MCQs.pdf

    Could someone explain the correct answer below? As in why “C” is the correct answer? Any help will be appreciated!

    As of December 1, year 2 a company obtained a $1,000,000 line of credit maturing in one year on which it has drawn $250,000, a $750,000 secured note due in five annual installments, and a $300,000 three-year balloon note. The company has no other liabilities. How should the company’s debt be presented in its classified balance sheet on December 31, year 2 if no debt repayments were made in December?

    a. Current liabilities of $1,000,000; long-term liabilities of $1,050,000.

    b. Current liabilities of $500,000; long-term liabilities of $1,550,000.

    c. Current liabilities of $400,000; long-term liabilities of $900,000.

    d. Current liabilities of $500,000; long-term liabilities of $800,000.

    Thanks!!

Viewing 7 replies - 1 through 7 (of 7 total)
  • Author
    Replies
  • April 18, 2013 at 7:32 pm #615900
    jsmithsae
    Member

    $250,000 due in 1 year

    $150,000 due in first year(750,000/5)

    Total current =400,000

    Total LTD=900,000 the remaining debt.

    BEC-75!
    AUD-84!
    REG-78!
    FAR-83!
    Ethics-Passed!
    Experience-Got that too

    Used Becker 2013 Self-Study & NINJA 10pt Combo Lite(AUD)

    April 18, 2013 at 7:43 pm #615901
    Anonymous
    Inactive

    Thanks you so much!!

    April 18, 2013 at 8:32 pm #615902
    Anonymous
    Inactive

    but i didn't understand how i should know that the 250,000 is current liab. ?

    April 18, 2013 at 8:58 pm #615903
    J
    Member

    You should report as current any current portion of what would otherwise be considered a long-term liability. For example, suppose you sign 30 year mortgage to purchase a home. Even though you will not be completely free of the liability for 30 years (or until the loan has been paid off), the first year is due within a year; hence, it must be reported as a current liability. The other 29 years would be long-term.

    You should understand that the $250,000 is a current liability because it comes due in one year (the general “critical value”, or cutoff, of current versus long-term is one year or the operating cycle of the company, whichever is greater.

    Good luck.

    May 6, 2014 at 6:39 am #615904
    ahugemistake
    Participant

    Did anyone save the above linked PDF? I would appreciate it if someone could re-up it.

    FAR - 78*
    AUD - 66, 79
    REG - 73, 76
    BEC - 79

    May 6, 2014 at 10:36 am #615906
    jeff
    Keymaster

    The “released” questions are licensed to the courses (like ninja MCQ).

    I've noticed most of the PDFs floating around have been taken down and are no longer available so you'll need to get them from your course in whatever way they distribute them to their students.

    November 2, 2014 at 7:20 pm #615907
    THISGIRLNEEDSTOPASSHERCPA
    Member

    Did anyone save the FAR 2013 aicpa release questions?

    “I can do all things through Christ who strengthens me" - Philippians 4:13
    BEC-80 yay!!
    AUD- 91 whohooo!
    REG- 67:( 74:( really?! I'll see you in April REG!!! 87!!!!!!!!!!!!!!!!! and I'm done as of August 2015!!!
    FAR- 68:( 79!!!! 2015 is soooo loving me!

  • Author
    Replies
Viewing 7 replies - 1 through 7 (of 7 total)
  • The topic ‘2013 FAR AICPA newly issued question’ is closed to new replies.