[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

[teeteenounouche]

Ok,so D is only for US GAAP and C is for IFRS…got it, thanks.

Florida:
AUD: 73, 81! Thank you Lord!
BEC: 73, 77! Thank you Lord! and WTB
REG: 71, 82! Thank you Lord! and A71
FAR: 72, 78! Thank you God and my Mommy in Heaven!

CPA Excel, Ninja Notes & Audio, Wiley Test Bank, CPAreviewforfree

[stoleway]

Under East Co.’s accounting system, all insurance premiums paid are debited to prepaid insurance. For interim financial reports, East makes monthly estimated charges to insurance expense with credits to prepaid insurance. Additional information for the year ended December 31, Year 2, is as follows:

Prepaid insurance at December 31, Year 1 $105,000

Charges to insurance expense during Year 2

(including a year-end adjustment of $17,500) 437,500

Prepaid insurance at December 31, Year 2 122,500

What was the total amount of insurance premiums paid by East during Year 2?

A. $332,500

B. $455,000

C. $437,500

D. $420,000

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

Mass-CPA

[teeteenounouche]

C. (i'm thinking you have to remove the year end adj amount)

Florida:
AUD: 73, 81! Thank you Lord!
BEC: 73, 77! Thank you Lord! and WTB
REG: 71, 82! Thank you Lord! and A71
FAR: 72, 78! Thank you God and my Mommy in Heaven!

CPA Excel, Ninja Notes & Audio, Wiley Test Bank, CPAreviewforfree

[SpartanCPA]

C. $437,500

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

[Anonymous]

B

[jasbeerch]

is it D

[Tarheelgirl]

B as well. I dislike Prepaid Insurance.

FAR - 46, 79 (7/8/14)
AUD - 56, 59, 2/23/15 3rd times a charm!
BEC - 69, 74 Really??
REG - April, I hope. Fingers crossed!

[How many letters do you need]

Going with C

MBA,CMA,CPA, CFF?, ABV?

[stoleway]

Answer is B

Answer (B) is correct.

The company debits prepaid insurance for all insurance premiums paid and credits the account when it charges insurance expense. Thus, total debits equal insurance premiums paid. The asset account had total credits (charges to expense) of $437,500 but increased by $17,500 ($122,500 ending balance – $105,000 beginning balance). Consequently, total debits (premiums paid) must have been $455,000 ($437,500 total charges to insurance expense + $17,500 increase in the asset account).

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

Mass-CPA

[NYCaccountant]

That answer has to be B.

If you started the year with 105,000, ending the year 122,500 that means you paid 17,500 more than you expensed.

If the expense account is 437,500, you had to pay 455,000.

Sorry, please ignore my post lol.

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[teeteenounouche]

Thanks NYCaccountant, clears up the adj portion of the question for me…

Florida:
AUD: 73, 81! Thank you Lord!
BEC: 73, 77! Thank you Lord! and WTB
REG: 71, 82! Thank you Lord! and A71
FAR: 72, 78! Thank you God and my Mommy in Heaven!

CPA Excel, Ninja Notes & Audio, Wiley Test Bank, CPAreviewforfree

[stoleway]

Question: 8 The best advantage of a zero-coupon bond to the issuer is that the

A. Interest can be amortized annually on a straight-line basis but is a noncash outlay.

B. Interest can be amortized annually by the APR method and need not be shown as an interest expense to the issuer.

C. Bond requires no interest income calculation to the holder or issuer until maturity.

D. Bond requires a low issuance cost.

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

Mass-CPA

[SpartanCPA]

C

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

[teeteenounouche]

A, let's hope i'm not 0-3…

I'll be back later this evening if you guys are still quizzing…

Florida:
AUD: 73, 81! Thank you Lord!
BEC: 73, 77! Thank you Lord! and WTB
REG: 71, 82! Thank you Lord! and A71
FAR: 72, 78! Thank you God and my Mommy in Heaven!

CPA Excel, Ninja Notes & Audio, Wiley Test Bank, CPAreviewforfree

[stoleway]

Answer (A) is correct.

Zero-coupon bonds do not pay periodic interest. The bonds are sold at a discount from their face value, and the investors do not receive interest until the bonds mature. The issuer does not have to make annual cash outlays for interest. However, the discount must be amortized annually and reported as interest expense.

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

Mass-CPA

[Author]

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