[jeff]

FAR Resources:

Free FAR Notes & Audio – https://www.another71.com/cpa-exam-study-plan

FAR 10 Point Combo: https://www.another71.com/products-page/ten-point-combo

FAR Score Release: https://www.another71.com/cpa-exam-scores-results-release

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[Amay]

@sm For your first question, they are saying that royalty income on a tax basis (i.e. cash basis) is MORE than book basis (i.e. accrual basis) by $12,000. Simply stated you recorded royalty income when earned of say 20,000 but you received royalty payments of 32,000. Thus, there is 12,000 more under tax basis than book basis.

Your book income right now only includes the 20,000 you recorded on an accrual basis, so in order to get to taxable income you need to add the additional 12,000 you recorded as tax basis and did not record on book basis. Does this make sense?

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 🙂

[Mel]

@Wanna_B_TXCPA2014 I hope this helps.

Pretax book income $400,000

(Income per the books, included items not taxable or tax deductible. These items need to be added/subtracted to get to tax income)

Excess of royalty income per books over tax return amount (20,000)

(We received 20K cash for royalty but recorded 40K on the books. The 20K difference needs to be deducted from income because it revenue earned and not receive)

Payment of a penalty per books 15,000

(Penalties are not deductible on a tax return so it needs to be added back to book income because it was originally deducted from book income)

Excess of depreciation per tax return over amount per books (25,000)

(Depreciation rates are different for taxes and book income. Per tax rules we did not deduct enough depreciation so we needed to deduct more to get to tax income.)

Taxable income $370,000

[Mel]

@Wanna_B_TXCPA2014 I hope this helps.

Pretax book income $400,000

(Income per the books, included items not taxable or tax deductible. These items need to be added/subtracted to get to tax income)

Excess of royalty income per books over tax return amount (20,000)

(We received 20K cash for royalty but recorded 40K on the books. The 20K difference needs to be deducted from income because it revenue earned and not receive)

Payment of a penalty per books 15,000

(Penalties are not deductible on a tax return so it needs to be added back to book income because it was originally deducted from book income)

Excess of depreciation per tax return over amount per books (25,000)

(Depreciation rates are different for taxes and book income. Per tax rules we did not deduct enough depreciation so we needed to deduct more to get to tax income.)

Taxable income $370,000

[lvr21]

Does anyone else feel like they are sure they can pass one minute to i'm goig to fail horribly the next?

{R: PASSED!! (I passed one!)}
{B: PASSED!! (Halfway there!)}
{F: PASSED!! (1 left!!!)}
{A: PASSED(I am done!!)}

[lvr21]

Does anyone else feel like they are sure they can pass one minute to i'm goig to fail horribly the next?

{R: PASSED!! (I passed one!)}
{B: PASSED!! (Halfway there!)}
{F: PASSED!! (1 left!!!)}
{A: PASSED(I am done!!)}

[Anonymous]

For the most part i have no excuse to not study because i have time, my job isn't super demaning. My brain is trying to get used to all the information, i've been studying a minimum of 4 hours each day for my first week. Saturday I studied for about 6 hours, and today i'm on my 5th hour of studying. I think it's way easier to study and clarify info through multiple choice than reading and taking notes from info given in the book. With the MC i dont even notice i'm going over my study time, and i'm not exhausted from the info. I'm using Gleim bc it's cheap, but i am a self studier (i know, not a word), and i HATE video presentations and audio.

Anyway, i did a practice exam just now and scored 50% and laughed kinda manically about it, so i think my attitude is good so far.

[Anonymous]

For the most part i have no excuse to not study because i have time, my job isn't super demaning. My brain is trying to get used to all the information, i've been studying a minimum of 4 hours each day for my first week. Saturday I studied for about 6 hours, and today i'm on my 5th hour of studying. I think it's way easier to study and clarify info through multiple choice than reading and taking notes from info given in the book. With the MC i dont even notice i'm going over my study time, and i'm not exhausted from the info. I'm using Gleim bc it's cheap, but i am a self studier (i know, not a word), and i HATE video presentations and audio.

Anyway, i did a practice exam just now and scored 50% and laughed kinda manically about it, so i think my attitude is good so far.

[Amay]

@sm For your second question. At the beginning of the year, AD was already 500K meaning that 5 years of depreciation have taken place (2,000,000/20years = 100k depreciation per year). Now you have to add this year's depreciation. 500k AD + the 100K for this year totaling 600K.

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]

@sm For your second question. At the beginning of the year, AD was already 500K meaning that 5 years of depreciation have taken place (2,000,000/20years = 100k depreciation per year). Now you have to add this year's depreciation. 500k AD + the 100K for this year totaling 600K.

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 🙂

[Wanna_B_TXCPA2014]

@mel4cpa more specifically I am not understanding how I was able to get the correct answer adding the numbers a different way than the solution. Was it luck that the numbers added up correctly?

[Wanna_B_TXCPA2014]

@mel4cpa more specifically I am not understanding how I was able to get the correct answer adding the numbers a different way than the solution. Was it luck that the numbers added up correctly?

[Mel]

All the time lvr!! LOL

[Mel]

All the time lvr!! LOL

[Mel]

I think it was just luck.

[Mel]

I think it was just luck.

[Author]

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