[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

[NYCaccountant]

Yes, the note is a non cash transaction and should be reported separately. Only the 14,000 would be reported in the investing section.

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[Anonymous]

Thank you…yet again 🙂

[Anonymous]

Thank you…yet again 🙂

[iwantmylifeback_]

Someone please explain…

“Acne's AP balance at dec 31 was 850,000 before necessary year-end adjustments, if any, related to the following:

At Dec 31,st acne has a 50,000 debit balance in its A/P resulting from a payment to a supplier for goods to be manufactured at Acme's specifications.

Goods shipped FOB destination on Dec 20 were received and recorded by Acne on Jan 2nd, the invoice cost was 45,000.

In its dec 31st B/S, what amount should Acne report as A/P?”

A 945000

B 900000

C 895000

D 850000

I chose D because I assumed a “debit” to A/P for a payment correctly reduced A/P so no adjustment would be necessary. Yet the answer is B.

BEC 85
AUD 99
REG 88
FAR 93

[iwantmylifeback_]

Someone please explain…

“Acne's AP balance at dec 31 was 850,000 before necessary year-end adjustments, if any, related to the following:

At Dec 31,st acne has a 50,000 debit balance in its A/P resulting from a payment to a supplier for goods to be manufactured at Acme's specifications.

Goods shipped FOB destination on Dec 20 were received and recorded by Acne on Jan 2nd, the invoice cost was 45,000.

In its dec 31st B/S, what amount should Acne report as A/P?”

A 945000

B 900000

C 895000

D 850000

I chose D because I assumed a “debit” to A/P for a payment correctly reduced A/P so no adjustment would be necessary. Yet the answer is B.

BEC 85
AUD 99
REG 88
FAR 93

[Monir]

@iwantmylifeback_, The key is FOB destination , the Goods were actully received Jan 2 as a result A/P was overstated by 50k. You are gonna have to credit 50k to A/P since you overstated A/P by 50k , it will make you balance !

Hope it helps

[Monir]

@iwantmylifeback_, The key is FOB destination , the Goods were actully received Jan 2 as a result A/P was overstated by 50k. You are gonna have to credit 50k to A/P since you overstated A/P by 50k , it will make you balance !

Hope it helps

[iwantmylifeback_]

I didn't take the 45K FOB destination part into consideration because the goods were received on Jan 2nd and therefore were correctly included in the following year requiring no adjustment. It's the 50K debit balance that is part of the solution.

BEC 85
AUD 99
REG 88
FAR 93

[iwantmylifeback_]

I didn't take the 45K FOB destination part into consideration because the goods were received on Jan 2nd and therefore were correctly included in the following year requiring no adjustment. It's the 50K debit balance that is part of the solution.

BEC 85
AUD 99
REG 88
FAR 93

[Monir]

yes, I think the invoice cost of 45k was given just to confuse candidates. I am assuming the company would pay 45 k and 5 k is discount. I just took 50k and reversed to A/P.

[Monir]

yes, I think the invoice cost of 45k was given just to confuse candidates. I am assuming the company would pay 45 k and 5 k is discount. I just took 50k and reversed to A/P.

[Anonymous]

The 50,000 shouldn't be in AP at all yet because it's a prepayment for something that hasn't been received yet…It needs to be removed and it should have been in a prepaid asset account.

[Anonymous]

The 50,000 shouldn't be in AP at all yet because it's a prepayment for something that hasn't been received yet…It needs to be removed and it should have been in a prepaid asset account.

[NYCaccountant]

Planning on taking a week off from studying after I face the beast tomorrow. If your test is this week, good luck in advance.

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[NYCaccountant]

Planning on taking a week off from studying after I face the beast tomorrow. If your test is this week, good luck in advance.

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[Author]

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