[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

[Anonymous]

Question:

Company Y buys widgets for $39,000 each and then usually sells them for $50,000. On Jan 1, Year 1, the company leases a widget to another company for 5 years with annual payments of $12,000. The first payment is made immediately. The useful life of a widget is 6 years. Assume the implicit interest rate built into this contract is 10% per year. What profit will the lessor recognize in Year 1?

I understand that is a capital lease and a sales-type lease because they sale widgets in addition to leasing them. I understand the following JE will be made:

COGS 39,000

Inventory 39,000

How are the credit amounts determined in the rest of the initial JE?

Cash 12,000

Lease Rec 48,000 (60,000 total received – year 1 payment of 12,000)

Sales Revenue 50,038 (??)

Unearned Interest Revenue 9,962 (??)

[Zackrampage]

@cpamommyof3 what are common mcq questions that could be asked about thise facts. Im so bad with number qiestions ahh

FAR - 62 , End of aug 2015
BEC - 67, 67
AUD - TBD
REG - TBD

[Zackrampage]

@cpamommyof3 what are common mcq questions that could be asked about thise facts. Im so bad with number qiestions ahh

FAR - 62 , End of aug 2015
BEC - 67, 67
AUD - TBD
REG - TBD

[Anonymous]

@zackrampage–They could ask anything and turn it in to a MCQ, like what is the amount of unearned interest revenue? And they would give you 4 choices for that. I try not to even look at the choices for MCQs until I have at least written out the JE and done the calculations on my own first. Seeing the choices will either confuse me or make me look for an obvious answer that may not be right. Plus–These are good practice for SIMS, where you have to know how to do the calculations and write the JEs without any choices in front of you.

[Anonymous]

@zackrampage–They could ask anything and turn it in to a MCQ, like what is the amount of unearned interest revenue? And they would give you 4 choices for that. I try not to even look at the choices for MCQs until I have at least written out the JE and done the calculations on my own first. Seeing the choices will either confuse me or make me look for an obvious answer that may not be right. Plus–These are good practice for SIMS, where you have to know how to do the calculations and write the JEs without any choices in front of you.

[Anonymous]

I highly recommend writing out the JEs for every question, whether it calls for it or not. I have been doing that for the past week and am now getting every JE related SIM correct. It may just be a fluke, but I really think they are correlated. The more I write them out the more I understand them. Same with the calculations. Don't look–just try to get it on your own first. This may be common sense for everyone else, but I studied for weeks without doing this and now things are just clicking so much better because I have to make myself work for it instead of just reading over notes and going through problems on autopilot. Good luck all!

[Anonymous]

I highly recommend writing out the JEs for every question, whether it calls for it or not. I have been doing that for the past week and am now getting every JE related SIM correct. It may just be a fluke, but I really think they are correlated. The more I write them out the more I understand them. Same with the calculations. Don't look–just try to get it on your own first. This may be common sense for everyone else, but I studied for weeks without doing this and now things are just clicking so much better because I have to make myself work for it instead of just reading over notes and going through problems on autopilot. Good luck all!

[Anonymous]

Someone please help me lay out the correct journal entries for these investing activities.

Green Co. had the following equity transactions at Dec. 31:

Cash proceeds from sale of investment in Blue

(CV- $60,000) >>>>>>>>>>>>>>>>>>>>> $75,000

Dividends rcvd on Grey Co. Stock >>>>>> 10,500

Common Stock purchased fr Brown Co. > 38,000

The net cash from investing activities in its Statement of Cash Flows at Dec. 31 under US GAAP:

Cash proceeds from sale of Blue Co. >>>>>>>>>>> $75,000

Cash paid to purchase Brown Co. Common Stock > (38,000)

Net Cash >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> $37,000

Thank you.

[Anonymous]

Someone please help me lay out the correct journal entries for these investing activities.

Green Co. had the following equity transactions at Dec. 31:

Cash proceeds from sale of investment in Blue

(CV- $60,000) >>>>>>>>>>>>>>>>>>>>> $75,000

Dividends rcvd on Grey Co. Stock >>>>>> 10,500

Common Stock purchased fr Brown Co. > 38,000

The net cash from investing activities in its Statement of Cash Flows at Dec. 31 under US GAAP:

Cash proceeds from sale of Blue Co. >>>>>>>>>>> $75,000

Cash paid to purchase Brown Co. Common Stock > (38,000)

Net Cash >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> $37,000

Thank you.

[Zackrampage]

@cpamommy3 the problem is I dnt know what areas have a je. You write out je's for all calculation mcq?

FAR - 62 , End of aug 2015
BEC - 67, 67
AUD - TBD
REG - TBD

[Zackrampage]

@cpamommy3 the problem is I dnt know what areas have a je. You write out je's for all calculation mcq?

FAR - 62 , End of aug 2015
BEC - 67, 67
AUD - TBD
REG - TBD

[Zackrampage]

How come the audio and notes don't mention bank rec?

FAR - 62 , End of aug 2015
BEC - 67, 67
AUD - TBD
REG - TBD

[Zackrampage]

How come the audio and notes don't mention bank rec?

FAR - 62 , End of aug 2015
BEC - 67, 67
AUD - TBD
REG - TBD

[Anonymous]

Nearly every transaction has an accompanying JE. If it has to get on the books, a JE is needed.

[Anonymous]

Nearly every transaction has an accompanying JE. If it has to get on the books, a JE is needed.

[Author]

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