[jeff]

Free Study Planner, Notes, Audio, Flashcards: https://www.another71.com/cpa-exam-study-plan/

Free CPA Exam Survival Guide: https://www.another71.com/cpa-exam-survival-guide/

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

[Anonymous]

@anjanja You may disregard my previous post since it's partially correct. Going back to my review material, you will use the carrying amount (no gain recognized) of asset given up ONLY if ANY of the following conditions exists:

1. Neither FV of asset given up nor FV of asset received is available.

2. Same line of business that facilitates sales to customer

3. Lack commercial substance.

The question does NOT specify if the transaction lacks commercial substance or if it's the same line of business so that means you can NOT use the carrying amount due to no. 2 & 3 exception. The question provided the FV of assets given up and received so you can't use exception no. 1 either. Therefore none of the exceptions were met so you have to use FV given up and recognize the gain in full.

This is purely based on my understanding of my review materials so anybody are free to agree or disagree. 🙂

[Anonymous]

@anjanja To answer your second question, boot is a monetary incentive but has nothing to do with commercial substance.

[Anonymous]

CPAby2015

that was my initial question. According to the explanation this transaction has commercial substance because “the configuration of the future cash flows associated with the asset received (a new van) differs significantly from the future cash flows of the asset surrendered”. I don't see how it's determined. As long as the actual exam question is clear, there should be no problem

[Anonymous]

Please can someone explain what is the budgetary control account in governmental-type fund and examples of what causes it to increase or decrease.

As the question below is kind of confusing

The budgetary control account of a governmental-type fund is increased when:

a. A purchase order is approved.

b. Appropriations are recorded.

c. Supplies previously ordered are received.

d. The Estimated Revenue account is closed.

[Anonymous]

Please can someone help

Pine City's year end is June 30. Pine levies property taxes in January of each year for the calendar year. One-half of the levy is due in May and one-half is due in October. Property tax revenue is budgeted for the period in which payment is due. The following information pertains to Pine's property taxes for the period from July 1, Year 1, to June 30, Year 2:

Calendar year Year 1 Year 2

Levy $ 2,000,000 $ 2,400,000

Collected in:

May $ 950,000 $ 1,100,000

July 50,000 60,000

October 920,000

December 80,000

The $40,000 balance due for the May Year 2 installments was expected to be collected in August Year 2. What amount should Pine recognize for property tax revenue for the year ended June 30, Year 2?

a $2,200,000

b $2,160,000

c.$2,360,000

d.$2,400,000

[Jspann225]

@presso Revenue is recognized using the 60 day rule. It was levied in July Year 1, so you would recognized revenue received and due from October Year 1, December Year 1, May Year 2, July Year 2, and August Year 2. You have to include August Year 2, because it is within 60 days of June 30. The answer should be 920,000 + 80,000 + +1,100,000 + 60,000 + 40,000 = 2,200,000

FAR - 93 - 7/1/14
AUD - 94 - 7/25/14
REG - 92 - 8/30/14
BEC - 89 - 10/6/14

[Jspann225]

Also the wording of that question is designed to confuse. Don't get to caught up in the wording and implement what you know and what you have learned in the study material. Governmental accounting is much more concerned with when the cash is collected rather than when it is due.

FAR - 93 - 7/1/14
AUD - 94 - 7/25/14
REG - 92 - 8/30/14
BEC - 89 - 10/6/14

[Anonymous]

presso

Is the answer A?

It says that property tax revenue is budgeted for the period in which payment is due. For the fiscal year starting July 1 Y1 and ending June 30 Y2 $2200000 is due (1/2 of 2000000 is due in October Y1 and 1/2 of 2400000 is due in May Y2).

I usually do this:

………….May………………..October

Y1

---

---

……….1000000……………..1000000

………….May………………..October

Y2

---

---

……….1200000……………..1200000

[Anonymous]

The budgetary control account of a governmental-type fund is increased when – I am not sure what they mean and which budgetary control account, but the only answer that makes sense is B

[Anonymous]

$2,200,000 is correct

Thanks anjanja and Jspann225

[Anonymous]

I don't understand the format of LIFO table in ninja SIM #44. Could somebody please take a look? I don't understand the logic of 3 last columns which I thought should be running total or something like that. As a result I got all the answers right and 42% grade. Is there some kind of conventional form?

[Anonymous]

A nugget from my daily reading:

If a stock dividend or split occurs after the end of the year but before the financial statements are issued, the weighted-average number of shares outstanding for the current year and any prior years presented in the current period in comparative form must be restated.

[Anonymous]

Ace Co. sold to King Co. a $20,000, 8%, 5-year note that required five equal annual year-end payments. This note was discounted to yield a 9 % rate to King. The present value factors of an ordinary annuity of $1 for five periods are as follows:

8% 3.992

9% 3.890

What should be the total interest revenue earned by King on this note?

a. $8,000

b. $9,000

c. $5,560

d. $5,050

The answer is C. They got 5,010 by doing 20,000/3.992, multiplied by 5, and then subtracted 19,490 (5,010 x 3.89). Why??

[Anonymous]

Can someone explain please

On the statement of operations for a nonprofit, nongovernmental hospital, which of the items below is included in the amount reported for “revenue and gains over expenses and losses” (the performance indicator)?

I. Unrealized loss on other than trading securities. The securities are included in unrestricted net assets.

II. Contribution received from a donor which cannot be used until next year.

a I only.

b II only.

c I and II.

d Neither I nor II.

[FARtogo2014]

Presso-Option D—Neither I or II.

AUD 81
REG 88
BEC 77
FAR 69 retake SCHEDULED TO TAKE IN Nov 2014

[Author]

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