[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

[D C]

Happy Birthday!

B - 80
A - 71, 67, 77
R - 71, 77
F - 72, 77
DONE!!
Becker Self-study all the way! Did use Ninja Notes & Audio for FAR.

[HopefulCPA0601]

@jpowell – happy birthday!!

ALSO! i am doing ninja mcq and came across that drd/equity method problem haha.. so here is a website i found that is a little helpful to explain what is going on…

https://www.macabacus.com/accounting/equity-method

In summary, per that question we are expecting to receive those earnings that we record as investment in investee. The undistributed earnings give rise to a deferred tax liability (“DTL”) payable when the earnings are ultimately distributed, or the investment is liquidated. If you do expect undistributed earnings to be paid out in the future, then you could make a case for applying the DRD to the undistributed earnings in the current period. (but normally accountants advise you against assuming you will receive earnings in the future)

SO – if this quesiton comes up for the exam (and i hope it doesnt) just remember to add up your equity in sub and dividends received, take out the DRD on both and multiply by tax rate:

Equity in earnings

+ dividends

=temp difference before drd

– temp * drd

=net amounts of temp differences

x tax rate

= DTL

PHEW!

BEC: 65 - 79* - 84 DONE
AUD: 65 - 76 DONE
REG: 63 - 77 DONE
FAR: 65 - 63 - 67 - 69 - 73 - 71 - 83 DONE

Becker Notes & Flashcards, Wiley Test Bank, Ninja MCQ

[jpowell31]

thanks, guys. @hopeful i think you said our exam date was your bday…we both have to celebrate regardless that weekend.

& that actually makes more sense….i do not like it when i have to think of two calcs and taking the difference from each if there's a way to do it in one shot..doubtful i'll remember this either but i will at least take note later…..lol

[CPA50]

Happy Birthday! Hope your day is full of lovely thoughts, food and friends 🙂

AUD 88 (expired), 80 retake
FAR 64,69,67,73,67,73,73,73, August 3
REG 75 (expired) September 7
BEC 72, 77

The adventure continues...

[HopefulCPA0601]

@jpowell31 it is! we'll have a beer/wine/champagne/whatever else you want toast that day haha

BEC: 65 - 79* - 84 DONE
AUD: 65 - 76 DONE
REG: 63 - 77 DONE
FAR: 65 - 63 - 67 - 69 - 73 - 71 - 83 DONE

Becker Notes & Flashcards, Wiley Test Bank, Ninja MCQ

[jpowell31]

cheers to mixing alcohol and no regrets! hah

[jpowell31]

especially not having to study on a hangover! that is one good thing this exam has done – “slow ya roll on the bevvy's you got ish to do tomorrow!”

[Anonymous]

HopefulCPA0601,

Is it not Equity in earnings minus dividends?

[HopefulCPA0601]

@anjanja – its the sum of the two:

The reason being that:

1) the equity is income you will receive one day if the subsidiary liquidates. Because you assume you will receive it one day, you treat it differently for book and tax because you say for tax that you are getting that income/cash.

2) dividend income reduces your investment for book, but for tax you get that dividend income as cash

For both cash income you get the benefit of a DRD.

Because of those 2 book/tax differences, a deferred arises on the net amount after DRD because DRD is a perm.

BEC: 65 - 79* - 84 DONE
AUD: 65 - 76 DONE
REG: 63 - 77 DONE
FAR: 65 - 63 - 67 - 69 - 73 - 71 - 83 DONE

Becker Notes & Flashcards, Wiley Test Bank, Ninja MCQ

[Anonymous]

why is it being subtracted here?

Taft Corp uses the equity method to account for its 25% investment in Flame. During teh year, Taft received dividends of $30k from Flame and recorded $180k as equity in earnings of Flame.

-all undistributed earnings of Flame will be distributed as dividends in future periods

-the dividends received deduction is 80% and is applicable here

-enacted tax rates are 30%

What should Taft report as deferred income tax liability?

A) $54,000

B) $10,800

C) $9,000 (correct answer)

D) $45,000

Book Tax Temp difference taxable in future

equity in earnings of investee 180,000 0

dividends received 0 30,000

Less 80% DRD (144,000) (24,000)

TOTAL 36,000 – 6,000 = 30,000 x 30% = $9,000

[UHC2005]

Because dividends received would reduce dividends to be received in the future period and as such would reduce the future tax liability. I'll have to look at the reference later to see the reasoning behind it, but I ran into a question similar to this last night.

Using Ninja MCQ, NINJA Notes, Audio, Flashcards and BLITZ, and 2014 Wiley Text

FAR - (61,63)
AUD - (68)

Keep Calm and RTMFQ

Accountant, what is best in life? To crush your MCQs, see them driven before you, and hear the lamentation of their SIMS!

[HopefulCPA0601]

@anjaja – no sorry you are correct! sorry about that, subtract dividends

BEC: 65 - 79* - 84 DONE
AUD: 65 - 76 DONE
REG: 63 - 77 DONE
FAR: 65 - 63 - 67 - 69 - 73 - 71 - 83 DONE

Becker Notes & Flashcards, Wiley Test Bank, Ninja MCQ

[ahugemistake]

Happy Birthday Jpowell. I'm getting FAR out of the way before my bday on the 14th, and I'm glad the scores don't come out a week later so I can properly enjoy that day.

So it's really winding down for me, and this weekend I plan on going all out. I printed the Ninja notes, and will re-write them on Saturday, then I will practice journal entries for the remaining day. Then if I have time left over I will do a practice exam.

On sunday I plan on reading the notes, doing another practice exam, and reviewing the JEs

On Monday – depends how I feel after the weekend. I will either call in sick or come to work and study a little at home the night before. Get a good nights rest. Wake up early on Tuesday

Exam is at 1:00PM so I will wake up around 7, eat, go for a run. and get ready. I plan on getting to San Francisco about a 1.5 hours before the exam and review the ninja notes, will listening to the ninja audio on the way to the testing center. This is it for me.

If I fail, I plan on continue reviewing everything as I was do more multiple choice and keep practicing and reschedule for October.

FAR - 78*
AUD - 66, 79
REG - 73, 76
BEC - 79

[jpowell31]

@hugemistake. sounds like a plan! Sorry, i can't see your signature anymore – is this your first exam?

[HopefulCPA0601]

@ahugemistake – wait our scores do come out a week later.. or was that sarcasm?

BEC: 65 - 79* - 84 DONE
AUD: 65 - 76 DONE
REG: 63 - 77 DONE
FAR: 65 - 63 - 67 - 69 - 73 - 71 - 83 DONE

Becker Notes & Flashcards, Wiley Test Bank, Ninja MCQ

[Author]

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