[jeff]

I’ve had a few requests for April/May Study Groups…March will be here before you know it.

In order to take an early April exam, you should begin studying…now. 🙂

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[rvcpa]

jrosen- saw that! good question

[ChristieF]

AHHH!! RTMFQ!!! That would help. Completely overlooked the Debit Balance. so it would be $140000.00

[Anonymous]

Damn you Debit balance!

[stoleway]

It will be adjusted by 40,000

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[Anonymous]

It's weird that Allowance has a debit balance, but I guess they wrote off a lot during the period. The ending balance for the Allowance account needs to equal a credit of 90K so the entry would be Bad Debt Expense of 140K and a credit to allowance of $140K. Right?

[Kenada]

can you kindly show how you got 140K please

CA Candidate. 05/27/2014 ~ 786/110
I am done!!

[Anonymous]

12 responses while I was typing. WTF? 🙂 Love the participation!!

[Anonymous]

@Kenada–I wrote out an explanation right above your post.

[rvcpa]

Northstar Co. acquired a registered trademark for $600,000. The trademark has a remaining legal life of five years, but can be renewed every 10 years for a nominal fee. Northstar expects to renew the trademark indefinitely. What amount of amortization expense should Northstar record for the trademark in the current year?

BTW not giving choices to the questions really makes every question trickier but much better for learning esp if you need help on the SIMS like I do.

[Anonymous]

You don't amortize intangible assets with an indefinite life. You evaluate them for impairment. I think.

[rvcpa]

Choice “a” is correct. Because the trademark is expected to be renewed indefinitely, there will be no amortization expense on the books. Amortization is only recorded for intangible assets with a definite life.

Choice “b” is incorrect. This amount represents the value of the acquired trademark amortized over 40 years. There will be no amortization due to the expectation that the trademark will be renewed indefinitely.

Choice “c” is incorrect. The 15 year useful life here is equal to the remaining legal life (5 years) and the first 10 year renewal. This is not applicable here due to the expectation of indefinite renewal.

Choice “d” is incorrect. This answer assumes amortization over the remaining legal life, which is not applicable because the company expects to renew indefinitely.

[rvcpa]

so mommy you are correct.

[Anonymous]

I got that one wrong twice before I remembered it. I swear the key to this thing is MCQ over and over and over.

[jrosen92770]

Hilltop Co.'s monthly bank statement shows a balance of $54,200. Reconciliation of the statement with company books reveals the following information:

Bank service charge

$10

Insufficient funds check

650

Checks outstanding

1,500

Deposits in transit

350

Check deposited by Hilltop and cleared by the bank for $125

but improperly recorded by Hilltop as $152

What is the net cash balance after the reconciliation?

BEC - 5/26/2013 75
REG - 8/31/2013 82
AUD - 11/24/2013 74, 2/9/2014 92
FAR - 5/25/2014 85

NY CPA

[samdiegoCPA]

This question is “easy” but the terminology throws you off. Can someone explain how to differentiate between this? First I'll post the question to see if you can answer it correctly:

A company enters into a three-year operating lease agreement effective January 1, year 1. The amounts due on the first day of each year are $25,000 in year 1, $30,000 in year 2, and $35,000 in year 3. What amount, if any, is the related liability on the first day of year 2?

a. $0

b. $5,000

c. $60,000

d. $65,000

AUD: 84
REG: 84
BEC: 79
FAR: 83

[Author]

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