[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]

I think NINJAs are napping now. LOL

[stoleway]

@oilgaslb

When GAAP income > Taxable Income = DTL

The following are the components that will cause GAAP income to be greater than TI.

This portion is subtracted from pre-tax income to arrive at TI

1. Revenues recognised first under GAAP

• Accrual sales

• Gain from involuntary conversion

• Equity Method Income

2. Expenses that are recognised first on tax return

• Excess of tax depreciation

When GAAP income < Taxable Income = DTA

The following are the components that will cause GAAP income to be less than TI.

This portion is added to pre-tax income to arrive at TI

1. Revenues recognised first on tax return

• Unearned revenue, suscriptions, rent etc.

2. Expenses recognised first under GAAP

• Excess book depreciation

• Warranty Expenses

• Bad debt Expense

• Organizational and startup cost.

These are the temporary differences, think of every subtraction to pre-tax income as a deferred tax liability and additions as deferred tax asset.

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

Mass-CPA

[HopefulCPA0601]

^ Make sure you think of subtractions from pre-tax on the tax return, but not on the financials will give you DTL. Reverse will give you DTA.

If you have more income on your books than you do on your tax return, you will pay more tax on your books = so tax will owe more money in the future = DTL

Dr. Deferred Tax Expense

Cr. DTL

If you have more income on your tax return than you do on your books (financial statements), tax will pay more money now, so you get a future deduction = DTA

Dr. DTA

Cr. Deferred Tax Benefit.

Easy tip to remember journal entries.. use common journal entry for assets (debit balance) and liabilities (credit balance). When you have a DTA, its a great thing for the future so you have a deferred benefit. If you have a DTL, its going to come back and bite you in the butt later, so its a deferred expense.

BEC: 65 - 79* - 84 DONE
AUD: 65 - 76 DONE
REG: 63 - 77 DONE
FAR: 65 - 63 - 67 - 69 - 73 - 71 - 83 DONE

Becker Notes & Flashcards, Wiley Test Bank, Ninja MCQ

[Anonymous]

Oh no. I have to go back to my study notes because you guys are saying the opposite of what I said. 🙁 And this is why I haven't been answering questions.

[Amay]

What is a payment notification coupon? We are able to get discounts on application fees for retakes??

BEC: 73, 81
AUD: 85
FAR: 71, 77
REG: 74, 75...finally DONE! 😀

*This is my 2nd attempt at the CPA exam. For all of you who have failed this exam many times, given up on it, or taken a break like me, remember that it is still possible to finish what you started...failure is the opportunity to begin again more intelligently 🙂

[rvcpa]

Took a 90 question quiz on wtb last night and got a 75% not really happy about it. Aiming for 85's and above.

[stoleway]

@CPAMommyof3

I dont think your solution above is wrong. Youre giving a different angle to the puzzle and it all ends up with one true answer. The way this conceptual stuff works, is to be able to understand it in your own language.

Sometimes I have to stick with my own understanding, becuase I get more confused when others are trying to explain it or introduce a different approach to the problem.

If I realise my approach is giving me correct answers, I block my ears to any other kind of explanation or clarification. lol

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

Mass-CPA

[ragepsn29]

Ninjas, I have a question. Let's say that Company A owns short-term investments. The investments appreciate in value. The company has not sold the investments yet. Would that increase in investments be considered as realized gains since it's from a short-term investment?

Thanks!

AUD - 65, 72, 70, 74, 81
FAR - 66, 71, 76
REG - 69
BEC - 80

[stoleway]

@ragepsn29

If it is classified as Trading then you have to recognize the increase in FV as a gain in the Income Statement.

The intention behind the investment changes everything, if no other information is given, I would assume it’s a Trading Investment.

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

Mass-CPA

[ragepsn29]

@stoleway, so after you recognize the gain in the income statement. Would you make an adjustment entry in your book to increase the investment value?

AUD - 65, 72, 70, 74, 81
FAR - 66, 71, 76
REG - 69
BEC - 80

[stoleway]

Yes, you CREDIT unrealized holding gain on short-term investment and DEBIT Security FV adjustment (This is a contra account)

The FV of the investment at balance sheet date becomes the new Carrying amount of the investment.

E.g. Trading Security bought @ Jan 1, Yr1 cost $200,000

FV @ Dec 31, Yr1= $300,000

Sec FV adjustment –short-term investment $100,000DR

Unrealized holding gain on short-term investment- Earning $100,000CR

Carrying amount for the short-term investment will increase by $100,000

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

Mass-CPA

[ragepsn29]

@Stoleway, Thank you!!!!!!!!!!You're the best!!!!!!!!!!!!!!!!!!!!!

AUD - 65, 72, 70, 74, 81
FAR - 66, 71, 76
REG - 69
BEC - 80

[hopeimnottoolatetobeacpa]

HI everyone, Can someone help me with cash flow question? 🙁 i'm a little confused. So, we know that dividend received would be adjusted under operating activities, but there's a case from becker mcq that's saying that we do not have to adjust the dividend received because it is already included in net income. So, everytime we are presented with dividend received fact we don't need to subtract that from net income in order for us to get to the operating activities?

[PocketsWithCash]

hopeimnot – Generally yes… Statement of cash flows is all about changes in cash so if you receive cash equal to the revenue recorded, there is no need to make an adjustment. In this case, that means dividends received = dividend revenue. Absent any information to the contrary (such as the existence of a dividend receivable account), you can assume dividends received = dividend revenue, meaning no adjustment.

FAR 97
REG 91
AUD 5/30/14
BEC 7/11/14

[PocketsWithCash]

FAR 97
REG 91
AUD 5/30/14
BEC 7/11/14

[Author]

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