FAR Study Group October November 2013 - Page 102

  • This topic has 1,757 replies, 131 voices, and was last updated 12 years ago by FAR Study Group MCQ’s.
Viewing 15 replies - 1,516 through 1,530 (of 1,757 total)
1 2 3 … 101 102 103 … 116 117 118
  • Author
    Replies
  • November 2, 2013 at 1:04 am #477526
    Tncincy
    Participant

    Taking the weekend challenge, working hard this week end. It's time to pass so let the hard work begin. Congrats to those that have received passing scores today.

    It begins with a 75
    Been here too long as a cheerleader....ready to pass

    November 2, 2013 at 1:22 am #477463
    Tuthegreat
    Participant

    @dante thanks..it was late..I had a brain fart..it makes sense now.

    November 2, 2013 at 1:22 am #477528
    Tuthegreat
    Participant

    @dante thanks..it was late..I had a brain fart..it makes sense now.

    November 2, 2013 at 3:20 pm #477465
    ndpendentbw
    Member

    Q from Bisk Review

    Strand Inc., provides an incentive compensation plan under which its president receives a bonus equal to 10% of the corporation’s income in excess of $200,000 before income tax but after deduction of the bonus. If income before income tax and bonus is $640,000 and the tax rate is 40%, the amount of the bonus would be

    a. $40,000

    b. $44,000

    c. $58,180

    d. $64,000

    The answer is A, but for the life of me I can’t figure out how to arrive to this answer. Can anyone please, please enlighten me?

    November 2, 2013 at 3:20 pm #477530
    ndpendentbw
    Member

    Q from Bisk Review

    Strand Inc., provides an incentive compensation plan under which its president receives a bonus equal to 10% of the corporation’s income in excess of $200,000 before income tax but after deduction of the bonus. If income before income tax and bonus is $640,000 and the tax rate is 40%, the amount of the bonus would be

    a. $40,000

    b. $44,000

    c. $58,180

    d. $64,000

    The answer is A, but for the life of me I can’t figure out how to arrive to this answer. Can anyone please, please enlighten me?

    November 2, 2013 at 3:29 pm #477467
    mjp44
    Member

    @ndpendentbw: The formula for these bonus compensation questions are Bonus= %(Income-Bonus). In this case the Bonus= 10%(440,000-B)D

    Do the alegbra..

    1.1B=44,000

    B=40,000

    FAR- PASSED (11/13)
    REG- PASSED (2/14)
    BEC- PASSED (5/14)
    AUD- PASSED (8/14)

    If it's important to you, you will find a way. If it isn't, you will find an excuse.

    November 2, 2013 at 3:29 pm #477532
    mjp44
    Member

    @ndpendentbw: The formula for these bonus compensation questions are Bonus= %(Income-Bonus). In this case the Bonus= 10%(440,000-B)D

    Do the alegbra..

    1.1B=44,000

    B=40,000

    FAR- PASSED (11/13)
    REG- PASSED (2/14)
    BEC- PASSED (5/14)
    AUD- PASSED (8/14)

    If it's important to you, you will find a way. If it isn't, you will find an excuse.

    November 2, 2013 at 3:43 pm #477470
    ndpendentbw
    Member

    @mjp44 – Thanks a bunch! It's been a while since I had to tackle an algebra problem.

    ~Happy Studying All~

    November 2, 2013 at 3:43 pm #477534
    ndpendentbw
    Member

    @mjp44 – Thanks a bunch! It's been a while since I had to tackle an algebra problem.

    ~Happy Studying All~

    November 2, 2013 at 7:59 pm #477472
    mjp44
    Member

    Hi guys two questions that I struggled to understand:

    1. Under FASB Financial Accounting Concepts 5, comprehensive income excludes changes in equity resulting from which of the following?

    a.Prior Period Error Correction

    b. Unrealized loss on A-F-S securities

    c. loss from discontinued operations

    d. Purchase of treasury stock

    the answer is D which i understand because purchasing t-stock is a change in equity resulting in a distribution to owners. But why cant it also be A? A prior period error correction is included in opening balance of retained earnings? Not sure why it would be included in comprehensive income?

    2. At the end of year 1, Lane Co, held trading securities that cost $86,000 and which had a year end market value of $92,000. During year 2 all of these securities were sold for $104,500. At the end of year 2, Lane had acquired additional trading securities that cost $73,000 and which had year-end market value of $71,000. What is the impact of these stock activites on Lane's year 2 income statement?

    a. Gain of $10,500

    b. Gain of $18,500

    c. Gain of $16,500

    d. Loss of $2000

    The answer is A. But i am confused with the recognition of gains/losses of trading securities. I always thought the gain of trading security = Selling price – cost. But in this case, they calculate the gain as Selling price- value of security at last balance sheet date. When the trading security is written up to fair value at the balance sheet date that is an unrealized gain. With trading securities, is gain/loss always calculated from the writeup/writedown in fair value at the last balance sheet date?

    FAR- PASSED (11/13)
    REG- PASSED (2/14)
    BEC- PASSED (5/14)
    AUD- PASSED (8/14)

    If it's important to you, you will find a way. If it isn't, you will find an excuse.

    November 2, 2013 at 7:59 pm #477536
    mjp44
    Member

    Hi guys two questions that I struggled to understand:

    1. Under FASB Financial Accounting Concepts 5, comprehensive income excludes changes in equity resulting from which of the following?

    a.Prior Period Error Correction

    b. Unrealized loss on A-F-S securities

    c. loss from discontinued operations

    d. Purchase of treasury stock

    the answer is D which i understand because purchasing t-stock is a change in equity resulting in a distribution to owners. But why cant it also be A? A prior period error correction is included in opening balance of retained earnings? Not sure why it would be included in comprehensive income?

    2. At the end of year 1, Lane Co, held trading securities that cost $86,000 and which had a year end market value of $92,000. During year 2 all of these securities were sold for $104,500. At the end of year 2, Lane had acquired additional trading securities that cost $73,000 and which had year-end market value of $71,000. What is the impact of these stock activites on Lane's year 2 income statement?

    a. Gain of $10,500

    b. Gain of $18,500

    c. Gain of $16,500

    d. Loss of $2000

    The answer is A. But i am confused with the recognition of gains/losses of trading securities. I always thought the gain of trading security = Selling price – cost. But in this case, they calculate the gain as Selling price- value of security at last balance sheet date. When the trading security is written up to fair value at the balance sheet date that is an unrealized gain. With trading securities, is gain/loss always calculated from the writeup/writedown in fair value at the last balance sheet date?

    FAR- PASSED (11/13)
    REG- PASSED (2/14)
    BEC- PASSED (5/14)
    AUD- PASSED (8/14)

    If it's important to you, you will find a way. If it isn't, you will find an excuse.

    November 3, 2013 at 2:55 am #477474
    Anonymous
    Inactive

    @mjr44 – I'm on my phone so forgive me if this isn't a detailed answer, but the mark-to-market price is as of the balance sheet date (which is presumably 12/31). And AFS securities = OCI and trading securities = gain/loss recognition.

    Does that help? If not I'll give a better answer when I'm at my computer tomorrow (if someone else hasn't already by then).

    November 3, 2013 at 2:55 am #477538
    Anonymous
    Inactive

    @mjr44 – I'm on my phone so forgive me if this isn't a detailed answer, but the mark-to-market price is as of the balance sheet date (which is presumably 12/31). And AFS securities = OCI and trading securities = gain/loss recognition.

    Does that help? If not I'll give a better answer when I'm at my computer tomorrow (if someone else hasn't already by then).

    November 3, 2013 at 3:48 am #477475
    Study Monk
    Member

    mjp44,

    I am not sure but the wording “excludes changes in equity” is probably unnecessary language to answer the question. You just need to know that comprehensive income is Net Income +Other Comprehensive Income. A prior period error adjustment would not affect income in this period and therefore it would not affect OCI which is a current period account. A prior period error adjustment would affect retained earnings going into this period. Answer B affects OCI and answer C affects income in this period.

    I spoke to an ancient wise man who sent me on a mushroom induced journey through an ancient forest to find the key to passing the CPA exam. A talking spider monkey told me to throw the last of my drinking water in the dirt to find what I was looking for. So I followed his instructions and the following message appeared in the soil:

    "Do 5000 multiple choice questions for each section"

    November 3, 2013 at 3:48 am #477540
    Study Monk
    Member

    mjp44,

    I am not sure but the wording “excludes changes in equity” is probably unnecessary language to answer the question. You just need to know that comprehensive income is Net Income +Other Comprehensive Income. A prior period error adjustment would not affect income in this period and therefore it would not affect OCI which is a current period account. A prior period error adjustment would affect retained earnings going into this period. Answer B affects OCI and answer C affects income in this period.

    I spoke to an ancient wise man who sent me on a mushroom induced journey through an ancient forest to find the key to passing the CPA exam. A talking spider monkey told me to throw the last of my drinking water in the dirt to find what I was looking for. So I followed his instructions and the following message appeared in the soil:

    "Do 5000 multiple choice questions for each section"

  • Author
    Replies
Viewing 15 replies - 1,516 through 1,530 (of 1,757 total)
1 2 3 … 101 102 103 … 116 117 118
  • The topic ‘FAR Study Group October November 2013 - Page 102’ is closed to new replies.