[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

[Anonymous]

Joe – You mean bank overdrafts .

In GAAP if you have a bank overdraft it is not included in cash – and Cash Equ – goes to the liablity section..

Unless at the same bank you have a positive balance and an overdraft account – you can net them to get a positive balance that is then included in Cash and Cash Equi

[jrosen92770]

Thanks Kenada.

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]

Operating Assets = ?

Operating Liabilities = ?

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

[Anonymous]

Why would we include Purchased real estate for $550,000 cash which was borrowed from a bank ? wouldn't that be a in and out – meaning we borrowed from the bank and paid it out to buy the land ?

I didn't get why it was included in the answer.

Kollar Corp.’s transactions for the year ended December 31, year 2, included the following:

Purchased real estate for $550,000 cash which was borrowed from a bank.

Sold available-for-sale investment securities for $500,000.

Paid dividends of $600,000.

Issued 500 shares of common stock for $250,000.

Purchased machinery and equipment for $125,000 cash.

Paid $450,000 toward a bank loan.

Reduced accounts receivable by $100,000.

Increased accounts payable by $200,000.

Kollar’s net cash used in investing activities for year 2 was

$675,000

$375,000

$ 50,000

$175,000

[jrosen92770]

Isn't it in 2 different sections: investing and financing?

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

[WANNABE_CPA]

is the answer $375000?

FAR : 68, 74, 83 Thank you God 🙂
BEC : 78 (8/27) 🙂
REG : 72 ,80 (2/25) 🙂
AUD : 69,67, 07/23

[jrosen92770]

175000?

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

[Anonymous]

Its D.

Investing activities include cash flows involving assets other than operating items. The investing activities are

Purchased real estate $(550,000)

Sold available-for-sale investment securities 500,000

Purchased mach. and equip. (125,000)

Net cash used in investing activities $(175,000)

The bank borrowing ($550,000), dividend payment ($600,000), issuance of stock ($250,000), and bank loan payment ($450,000) are financing activities. The reduction of accounts receivable ($100,000) and the increase in accounts payable ($200,000) are operating items.

i dont get why land purchase was included esp when a bank loan was used to buy it

[Anonymous]

The borrowing from the bank would be under Financing and the outflow to purchase PPE would be under investing

[Anonymous]

So, I had done about 2300 questions in the WTB when I sat for FAR the first time…since then, I'm at 4010 and have raised my cumulative score by 5 points. Hopefully this is a good sign….

[Anonymous]

Hmmm

I don't know why I remember there is a situation where if you borrowed to buy something it would not be part of cashflows..

I can't remember where i saw it but when i do i will post it up.

[WANNABE_CPA]

https://www.another71.com/cpa-exam-forum/topic/cash-flow-statement-1 ..i looked it up and link from another71 popped, so check it, has kinda same explanation as amanda 🙂

FAR : 68, 74, 83 Thank you God 🙂
BEC : 78 (8/27) 🙂
REG : 72 ,80 (2/25) 🙂
AUD : 69,67, 07/23

[Anonymous]

Tell me if Im understanding this correctly:

The debt service governmental fund pays off long term principal and interest for the other governmental type funds. But, the other funds (probably only the general fund and capital projects fund) can pay off short term principal and interest.

[Anonymous]

Also for governmental component units…If it's separately elected, legally separate, and financially independent, the component is included with the primary government. If not, then it's considered a component unit and is either shown via blended presentation or discrete presentation.

[Anonymous]

Thank you…

Ok thats what i need to see purchased with cash- and they borrowed from the bank – thats Investing and Financing

Now if it doesn't say purchased with cash. thats where I won't include this in investing or Financing since the actual cash didn't flow through yes.

I will recognize any interest we pay in the loan in Operating activities.

[Author]

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