[jeff]

Welcome to the Q1 2016 CPA Exam Study Group for FAR.

Some BLITZ videos to help your exams: https://www.another71.com/ninja-blitz

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

[Anonymous]

@Agus you are going to pass next time! You know what to do, stick with what works for you and you will see!

[Anonymous]

In preparing its cash flow statement for the year ending December 31, 20X1, Reve Co. collected the following data:

Gain on sale of equipment $ (6,000)
Proceeds from sale of equipment 10,000
Purchase of A.S., Inc., bonds
(par value $200,000) (180,000)
Amortization of bond discount 2,000
Dividends declared (45,000)
Dividends paid (38,000)
Proceeds from sale of treasury
stock (carrying amount $65,000) 75,000
In its December 31, 20X1, statement of cash flows, what amount should Reve report as net cash used in investing activities?
A.
$170,000

B.
$176,000

C.
$188,000

D.
$194,000

[Anonymous]

@Agus
Payment of 180,000
– 10,000 proceeds from sale equip
=170,000 used?

[Anonymous]

Yes, A is correct

[Anonymous]

Its been so long since I studied EPS that I do not know if I read this before but just learned that: “Securities of a subsidiary that are convertible into parent company's common stock are considered potential common shares for diluted EPS”. In other words they are included in the Parent's diluted EPS calculation….

[Anonymous]

@Cortes, are you studying just with Ninja?

[Anonymous]

@Agus only Ninja, I have a Wiley book but I haven't used it. As of now I think Jeff's products have helped me get a good grasp of the concepts and even if I wanted too I cannot afford anything outside the Wiley books and Ninja materials. And you? What are you using?

[Anonymous]

Here is a little fun MCQ

Tara Co. owns an office building and leases the offices under a variety of rental agreements involving rent paid in advance monthly or annually. Not all tenants make timely payments of their rent. Tara’s balance sheets contained the following data:

Year 1 Year 2
Rentals receivable $9,600 $12,400
Unearned rentals 32,000 24,000

During Year 2, Tara received $80,000 cash from tenants. What amount of rental revenue should Tara record for Year 2?

A.
$90,800

B.
$85,200

C.
$74,800

D.
$69,200

[marqzho]

cortes123

A？

REG 90
FAR 95
AUD 98
BEC 84

[Anonymous]

@marqzho yes A is the answer

[Anonymous]

On January 1, 20X1, Dallas, Inc., purchased 80% of Style, Inc.'s, outstanding common stock for $120,000. On that date, the carrying amounts of Style's assets and liabilities approximated their fair values. During 20X1, Style paid $5,000 cash dividends to its stockholders. Summarized balance sheet information for the two companies follows:

Dallas Style
12/31/X1 12/31/X1 01/01/X1
——– ——– ——–
Investment in Style (equity method) $132,000
Other assets 138,000 $115,000 $100,000
Common stock 50,000 20,000 20,000
Additional paid-in capital 80,250 44,000 44,000
Retained earnings 139,750 51,000 36,000
The combination is accounted for as an acquisition (initiated in a fiscal year beginning after December 15, 2008). What amount should Dallas include from Style as part of consolidated net income in its 20X1 income statement?

A. $12,000

B. $15,000

C. $16,000

D. $20,000

[Anonymous]

I do not know if the copy pasted MCQ above is understandable, but if someone can read thru the messed up format and know why the answer is D please share your opinion.

[Lidis]

Hi Cortes, The answer is A

I solved with a JE

DR Cash 80,000
DR Rental Rec 2,800
DR Unearned Rentals 8,000
CR Rent Revenue 90,800

[Lidis]

Cortes
Answer D

Beg RE= 36,000
Div paid = <5,000>
NI = 20,000
End RE = 51,000

[Anonymous]

@Revenue I kind of like those types of MCQ where you have to determine the accrual effect of increases and decreases of accounts but right now there are some MCQ from consolidations that are bothering me. Do you happen to know the reasoning behind the answer of the consolidattion MCQ that I posted above?

[Author]

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