Yes, answer is A and this threw me off because I feel certain I've answered other questions about temporary declines that were reported in interim statements. What am I missing?
Album Co. issued 10-year, $200,000 debenture bonds on January 2. The bonds pay interest semiannually. Album uses the effective interest method to amortize bond premiums and discounts. The carrying value of the bonds on January 2 was $185,953. A journal entry was recorded for the first interest payment on June 30, debiting interest expense for $13,016 and crediting cash for $12,000. What is the effective interest rate for the debenture bonds?
I was thinking since it is a gain then nothing would be reported. The loss would not be reported in the first quarter because it was thought to be temporary.
AUD - 73,91
FAR - 79 - Thank you God!
BEC - 73,79!!!!
REG - 92 whatttt??!
I used Becker review + flashcards, Ninja Audio, Ninja MCQ supplement on BEC and REG.
Lauren- I am glad I am not the only one. I am ready to get this first test under my belt…pass or fail. I have definitely come to the realization that my study techniques in the early preparation were not that beneficial. I am just going to prepare as much as I can and hope that they test on the 40% that I know. I need to practice more with the SIMS. I am trying to work through them with the codification because many have said that it is a really good reference to answer the questions. That is my focus tomorrow along with Govt and NFP. Then just 30 question progress test from here on out. Thanks for the advice. I am just freaking out because I have put a lot of time in but don't feel as prepared as I thought I would be at this point.
FAR - JULY 2014 - PASSED
BEC - MAY 2015 - PASSED
REG - AUG 2015 - PASSED
AUD - AUG 31 2015
Nota – the loss in the problem was said to be temporary.. therefore you wouldn't recognize a loss or a gain until the 4th quarter. When it is a permeant loss, you recognize in the quarter that it occurs and then if a gain happens you only recognize up to the amount of the loss incurred in the previous quarter.
Stoleway – with both Amanda and Joe saying only 40% of Becker's stuff was on the test, I'm interested more than ever to know how much of Gleim is on it.
A company reports its gross profit as $200,000 in Year One and $260,000 in Year Two. However, an independent auditor discovers that mistakes were made in each year in determining ending inventory. At the end of Year One, merchandise costing $18,000 was omitted from the year-end physical inventory count. At the end of Year Two, merchandise costing $7,000 was accidentally counted twice. What does the auditor believe the gross profit should be for Year Two?
Yes. Temporary decline in inventory is not recognized as losses in the interim period.
Permanent decline in inventory should be recognized.Later recoveries are recognized as gains only to the extent of previous losses.Cannot be written up above cost.
Anna. It is 235k. The begenning inventroy was low by 18000 so you deduct. The ending inventory is high by 7000 so you deduct.
Because that amount is added to arrive at cost of goods sold, reported cost of goods sold is too low by $18,000. The ending inventory for Year Two was too high by $7,000. Because that amount is subtracted in calculating cost of goods sold, reported cost of goods sold is too low by another $7,000. The two errors together have made reported cost of goods sold too low by $25,000. Increasing cost of goods sold by $25,000 to arrive at the appropriate figure leads to a decrease in gross profit from $260,000 to $235,00 –
BEC Passed
FAR Passed
AUD Passed
REG Passed
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