[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

[pia ach]

Can someone help me with this question…

What is the unrealized gain /loss for below securities in year 2?

Trading security cost 150,000 ; market value year 1- 100,000 year 2 – 155,000

AFS cost 78000 ; market value year 1 93600, year 2 100000

Finally done!!! Experience-pending. Ethics- Pending.
Reg 78 / 73/82.
Aud 74/89.
BEC 72 /78.
FAR 74/ 73/ 82.

[teeteenounouche]

pia ach, the unrealized g/l is the difference between yr 1 and yr 2 market values because securities are reported at FV at each balance sheet date. TS in Income and AFS in OCI.

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

[How many letters do you need]

Tee you are in fire tonight!

MBA,CMA,CPA, CFF?, ABV?

[pia ach]

Thats what i thought too ,but becker says for AFS the gain is $22,000 comparing it with the cost.

Finally done!!! Experience-pending. Ethics- Pending.
Reg 78 / 73/82.
Aud 74/89.
BEC 72 /78.
FAR 74/ 73/ 82.

[pia ach]

For trading it is $55,000 the difference between year 1 & 2 but am confused why they compared it with the cost for AFS

Finally done!!! Experience-pending. Ethics- Pending.
Reg 78 / 73/82.
Aud 74/89.
BEC 72 /78.
FAR 74/ 73/ 82.

[How many letters do you need]

Not to throw stones at the all mighty Becker but I just don't see how that could be correct

MBA,CMA,CPA, CFF?, ABV?

[teeteenounouche]

Pia, is it gain or unrealized gain for AFS? There is a difference…

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

[pia ach]

It does say unrealized …

Finally done!!! Experience-pending. Ethics- Pending.
Reg 78 / 73/82.
Aud 74/89.
BEC 72 /78.
FAR 74/ 73/ 82.

[pia ach]

Will there be a difference if they ask where the unrealized loss goes to .. as in OCI or AOCI? because they have highlighted accumulated in the question when they compare the cost to the year 2 fair value

Finally done!!! Experience-pending. Ethics- Pending.
Reg 78 / 73/82.
Aud 74/89.
BEC 72 /78.
FAR 74/ 73/ 82.

[teeteenounouche]

Can you copy and post the whole question so we can analyze it? It will be easier to analyze…

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

[Anonymous]

I don't get the answer to this question in WTB.

On December 31, year 1, Moon, Inc. authorized Luna Co. to operate as a franchisee for an initial franchise fee of $100,000. Luna paid $40,000 on signing the agreement and signed an interest-free note to pay the balance in three annual installments of $20,000 each, beginning December 31, year 2. On December 31, year 1, the present value of the note, appropriately discounted, is $48,000. Services for the initial fee will be performed in year 2. In its December 31, year 1 balance sheet, what amount should Moon report as unearned franchise fees?

The answer is $88,000

[pia ach]

I dont have a pdf for it, its a video, so i will type it out another question which is shorter…

what amount should T report as net unrealized loss on AFS MES at Dec 31 year 2 in AOCI on the B/S?

cost Year 2 MV Year 1 MV

AFS 150000 130000 120000

Finally done!!! Experience-pending. Ethics- Pending.
Reg 78 / 73/82.
Aud 74/89.
BEC 72 /78.
FAR 74/ 73/ 82.

[pia ach]

@ AleFLCPA Since the Services for the initial fee is not complete, you cannot recognize revenue till it is complete (year 2). So the initial down payment $ 40k and the present value $48k will be charged to unearned fees for year 1.

Finally done!!! Experience-pending. Ethics- Pending.
Reg 78 / 73/82.
Aud 74/89.
BEC 72 /78.
FAR 74/ 73/ 82.

[teeteenounouche]

Ok, I get that but how is the interest recorded? Isn't that interest revenue?

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

[NJPRU]

pia, my take on this question is that it is asking for NET unrealized loss… it is my understanding that both trading and AFS are marked down to FV at the end of the year.. therefore..

YR1 you have a 30,000 loss = 150,000 cost – 120,000 FV

YR2 you have a 10,000 gain = 120,000 – 130,000 FV

30,000 unrealized loss – 10,000 unrealized gain = 20,000 net loss.

as the FVs are both considered temporary it seems, they should net to 20,000 in OCI – if it were permanent the gain would have gone into earnings for AFS (unlike TS where everything goes into earnings – losses and gains).

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

IM GOING TO BE A CPA!!!!!

[Author]

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