[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

[stoleway]

@SpartanCPA

The last salary for yr2 was paid for the month ended 25 Dec yr2, this date fell on Friday.

Dec 26 and 27 is a weekend, so don't worry about it.

You have 4 days of December salary that has not been accounted for ( 28 Dec- 31 Dec).

To calculate the accrued salary for yr2

4/5*80000= 64,000

Add the $25,000 for vacation time earned in Year 2 not taken by December 31

Final Answer is 89,000.

The $20,000 accrued for yr1 was brought into the situation to distract you. This amount will be accrued in yr 1 and payable during yr2…..You cannot expense it in the yr2 statement

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

Mass-CPA

[How many letters do you need]

stoleway…yeah but it is referring to balance sheet, not income statement…wouldn't the balance sheet vacation payable account be a running balance?? “the amounts reported as” when referring to balance sheet to me means running balance, not adjustment or expense amount. Vacation should be payable until used or employee leaves, correct? Or am I looking at this all wrong?

MBA,CMA,CPA, CFF?, ABV?

[stoleway]

@How many letters do you

I know this is weird, but this is vacation for the prior year and it is assumed that this accrual has already been taken care of ( either used by employees or paid) during yr2. So there will be nothing left for this accrual at the end of the year.

Hope it makes sense?

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

Mass-CPA

[Anonymous]

That's the problem I have with this questions. We aren't told if the vacation days that were accrued for at the end of the first year have been taken or not. If they weren't we would continue to accrue for them since no information is given that they don't roll over to future years. I hate the ASSUME bs. You know what happens when you assume?

[NJPRU]

stoleway – you're using gleim as well i see – chapter 10?

AUD: DONE
FAR: DONE
BEC: DONE
REG: DONE

IM GOING TO BE A CPA!!!!!

[How many letters do you need]

Stoleway – I get that but the logic isn't there. If they had mentioned that the company doesn't allow vacation rollover I could see that. In the real world vacation balance isn't separated by year unless there is no rollover…it's just one payable account that could be taken or paid at any time so it's considered current. I just think it's a bad assumption since most companies nowadays allow rollover. /end rant

MBA,CMA,CPA, CFF?, ABV?

[stoleway]

@NJPRU

Yes im using Gleim, Im currently on chapter 13

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

Mass-CPA

[stoleway]

What will be the effect of excluding Markdown in determining Cost Retail Ratio?

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

Mass-CPA

[jrosen92770]

Help please…I get the approach just not sure about the markup..of 40%. Isn't the cost = $40,000/1.4 or $28,571

The following items were included in Opal Co.'s inventory account at December 31:

Merchandise out on consignment, at sales price, including 40%

markup on selling price

$40,000

Goods purchased, in transit, shipped F.O.B. shipping point

36,000

Goods held on consignment by Opal

27,000

By what amount should Opal's inventory account at December 31 be reduced?

a.

$103,000

b.

$51,000

c.

$43,000

d.

$67,000

Explanation

Choice “c” is correct. The 40% markup and the goods held on consignment (not belonging to Opal) must be eliminated to record inventory at cost. The $36,000 of goods shipped FOB shipping point should be included in inventory (title has passed to Opal). 40% x $40,000 = $16,000 plus $27,000 = $43,000.

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

[stoleway]

@jrosen92770

This question has tripped me up before, so I understand your frustration with this one..lol

But this is how I have been force to understand it ( According to Gleim).

If your Mark up is 40%, then obviously, your inventory value or cogs will be 60%.

Treat this kind of questions, the same way you will treat gross profit. I think your markup will basically be your gross profit (sales price- cogs)

I stand to be corrected though.

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

Mass-CPA

[jrosen92770]

Thanks Stoleway. That makes sense from that vantage point.

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

[jrosen92770]

Thanks Stoleway. That makes sense from that vantage point.

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

[SpartanCPA]

The wording can be very tricky with that type of question. I got it wrong too.

Merchandise out on consignment, at sales price, including 40% markup on selling price = $24

vs.

Merchandise out on consignment with a 40% markup = $28,571

AUD - 01/18/14 - 81
BEC - 05/29/14 - 85
FAR - 07/18/14 - 81
REG - 11/18/14 - 80

Becker CPA Review
NINJA Audio
Michigan State University

[stoleway]

Its quiet in here, who's there?

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

Mass-CPA

[NJPRU]

stoleway – i wish i could put FAR in a headlock and never let go. lol

AUD: DONE
FAR: DONE
BEC: DONE
REG: DONE

IM GOING TO BE A CPA!!!!!

[Author]

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