[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

[Amay]

Mammabear (I see that's what they are calling you lately) I missed you guys too! This forum is what keeps me accountable when I am slacking off, like this week! I need to remember to keep it open at work so I don't miss anymore good stuff and I'm constantly reminded to be productive so I can get those study hours in later. And LOL at your NINJA comment.

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 🙂

[Anonymous]

Yep–Mamabear, Mom, Mommy, Mama, Madre–It's all good. I've got 3 different versions coming from my infant, toddler, and preschooler with different pitch levels so I'm used to just going by it all. I will say mamabear is my personal favorite though. 🙂

[Anonymous]

@samdiego–Good luck on getting the 17th and have fun in Mexico!!!

[Amay]

Can someone please help me with this quick question?

The following accounts were abstracted from Roxy Co.'s unadjusted trial balance at December 31:

Debit (Dr) Credit (Cr)

Accounts receivable $ 1,000,000

Allowance for uncollectible accounts 8,000

Net credit sales $ 3,000,000

Roxy estimates that 3% of the gross accounts receivable will become uncollectible. After adjustment at December 31, the allowance for uncollectible accounts should have a credit balance of:

a. $90,000

b. $30,000

c. $82,000

d. $38,000

Explanation

Choice “b” is correct. $30,000.

Gross accounts receivable $ 1,000,000

3% will become collectible 3%

Allowance for uncollectible AR 12-31 $ 30,000

Note: It is important to read the question carefully. The tendency here is to compute the allowance as a % of sales.

I know this is not an answer choice, but assuming it was, why would it not be 22k? 30 credit – 8 debit? Thanks!

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 🙂

[Anonymous]

When you calculate Allowance for Uncollectible Accounts based on a % of A/R you are calculating the ending balance needed. To get to that balance you would debit Bad debt Expense of 22,000 and credit AUA for $22,000, but your ending balance will be $30,000.

[Anonymous]

When you calculate your AUA as a % of sales you would be looking for what to book to Bad Debt Expense and to AUA, not for the ending balance of AUA. The way I remember it is AR is a balance sheet account which has an ongoing BALANCE so you are calculating to solve for the balance and what you book for the period will bring you to that balance. Sales is an income statement account which are amounts for the PERIOD so you are calculating to solve for what to book for the period.

[Amay]

Thanks Mamabear, but I still don't get why you do not deduct the existing 8k debit balance from the 30k credit balance for a net credit balance of 22k? The question presents the info as unadjusted and asks for answer adjusted..

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 🙂

[How many letters do you need]

Amay – this one tripped me up too. It's asking what the final balance is, not the amount amount expensed. So in this case it's just the AR Bal × allowance %. The beauty is if you catch it it's a much quicker calculation if you happen to get it on the exam. I remember having to stare at the question and answer for 10 mins before I got it lol…

MBA,CMA,CPA, CFF?, ABV?

[Anonymous]

Because what is already in the account has nothing to do with how you calculate the ending balance, which is just your A/R * your uncollectible %. If they had asked what the period's bad debt expense was then you would have deducted the 8K because you would calculate that the ending balance needed to be 30,000 and you already have a credit balance of 8,000 so you need to book 22,000 more to get your ending balance to be correct (adjusted) balance. Does that help or did I just confuse you more?

[teeteenounouche]

Picture a T account Amay…maybe that will help.

Going to sleep, see you guys in the morning

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

[Amay]

OK I get it. it's just the way they are asking the question. What else is new? My next one was actually asking for the expense. Ahhhhh tricky CPA how much I loathe thee…

Thank you both! 🙂

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 🙂

[Amay]

Thanks Teetee! I honestly think my allergies are clogging up my brain! Should go to bed too.

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 🙂

[Anonymous]

I'm out too. Night guys.

[samdiegoCPA]

Just spent 2 hours on MH370 news, now I am out to sleep. Not sure what I plan on studying tomorrow… perhaps re-doing notes for Consolidations with the notes the person posted in here!

AUD: 84
REG: 84
BEC: 79
FAR: 83

[How many letters do you need]

I've got consolidations in theory but when it comes down to the application I'm freaking lost. Count one more for printing out those notes! This is the first topic that I was a little disappointed in the NINJA notes. I think a little more beef on consolidations would be helpful. Maybe I'll try the blitz and see if that helps. Looks like I'm locking up the FAR shop for the night….

MBA,CMA,CPA, CFF?, ABV?

[Author]

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