[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]

@Stoleway, D for $9,000

[WANNABE_CPA]

@Stoleway D

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

[stoleway]

Answer is D

The deferred tax liability constitutes the “deferred tax consequences attributable to taxable temporary differences. A deferred tax liability is measured using the applicable enacted tax rate and provisions of the enacted tax law.” Taft’s recognition of $180,000 of equity-based earnings creates a temporary difference that will result in taxable amounts in future periods when dividends are distributed. The deferred tax liability arising from this temporary difference is measured using the 30% enacted tax rate and the dividends received deduction. Accordingly, given that all the undistributed earnings will be distributed, a deferred tax liability of $9,000 [($180,000 equity – $30,000 dividends received) × 20% not deductible × 30% tax rate applicable after the current year] should be reported.

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

Mass-CPA

[Anonymous]

Here's how I got it:

Earnings…. 180,000

Less Div….. 30,000

……………

---

Net Receipt 150,000

…………………x 20%***

……………

---

Taxable Inc… 30,000

Enacted Tax ….30%

……………..

---

DTL …………9,0000

***To simplify the rule of exemption of tax rate, let's just remember this:

0-19% share => 30% Taxable

20-80% share => 20% Taxable

The rest is not taxable!

[Not a Quitter]

Hmm I messed up because I didn't subtract the $30k. Even reading the explanation I'm not understanding why that's done. I thought the $180k was undistributed earnings?

FAR- 85 I'm DONE!
BEC- 75
REG- 60,60,75
AUD- 74,74,83

CPAExcel used for BEC, AUD, REG
Exam Matrix used for FAR plus NINJA Blitz, cpareviewforfree and a little CPAExcel

[Anonymous]

@Wannabe, I checked Becker's F4 SIM. I has 2 sets of SIMS.

Be specific please. If you post the problem, someone from the group may be able to help explain it on the thread.

[stoleway]

Cor-Eng Partnership was formed on January 2 of the current year. Under the partnership agreement, each partner has an equal initial capital balance accounted for under the goodwill method. Partnership net income or loss is allocated 60% to Cor and 40% to Eng. To form the partnership, Cor originally contributed assets costing $30,000 with a fair value of $60,000 on January 2 of the current year, while Eng contributed $20,000 in cash. Drawings by the partners during the current year totaled $3,000 by Cor and $9,000 by Eng. The partnership’s current-year net income was $25,000. Eng’s initial capital balance in the partnership is

A. $25,000

B. $20,000

C. $60,000

D. $40,000

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

Mass-CPA

[WANNABE_CPA]

@Amor D, sorry i figured after spending few more minutes on it..Thanks for looking.

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

[Not a Quitter]

@stoleway- C

FAR- 85 I'm DONE!
BEC- 75
REG- 60,60,75
AUD- 74,74,83

CPAExcel used for BEC, AUD, REG
Exam Matrix used for FAR plus NINJA Blitz, cpareviewforfree and a little CPAExcel

[Anonymous]

The wordings of: “The dividends received from Flame are eligible for the 80% dividends received deduction.” are bonus to the examinees.

Becker's F6-49 about Investee's Undistributed Earnings lays this out:

ALL PERMANENT DIFFERENCES

Ownership 0-19%…………. 70% Exclusion

Ownership 20-80%……….. 80% Exclusion

Ownership over 80%……..100% Exclusion

I found the above lay-out as ridiculously complicated.

It could have been stated is a simpler note such as:

0-19% share => 30% Taxable

20-80% share => 20% Taxable

The rest is not taxable!

[NJPRU]

stoleway – c

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

IM GOING TO BE A CPA!!!!!

[stoleway]

C is correct……………….how did you guys came up with C

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

Mass-CPA

[Not a Quitter]

@ stoleway because of the words “an equal initial capital balance” which means Eng's contribution has to be bumped up to $60,000 to match the other contributor.

FAR- 85 I'm DONE!
BEC- 75
REG- 60,60,75
AUD- 74,74,83

CPAExcel used for BEC, AUD, REG
Exam Matrix used for FAR plus NINJA Blitz, cpareviewforfree and a little CPAExcel

[stoleway]

@NotaQuitter

Thank you, I wasn't paying attention to that part of the puzzle.

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

Mass-CPA

[stoleway]

A city council designates funds in the enterprise fund for future equipment replacement. The enterprise fund should report this as

A. An unrestricted component of net position.

B. A net investment in capital assets.

C. A restricted component of net position.

D. A designated component of net position.

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

Mass-CPA

[Author]

Replies