[jeff]

SO I know every test is different but does anyone have any insight on what has been heavily tested recently? I take the exam Monday and I need to narrow my focus….Thanks!

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

[Anonymous]

@cpahopeful

I didn't plan on going through the book again but I guess I will. Not exactly sure how to go about doing so because I don't necessarily need to read through every page of every chapter. This seems like it will be a very time consuming process as well. I'll get started on it tonight and see how it goes. Thanks!

[zkaraca2012]

@dsteele139 – Always fair value as you're giving consideration. Also do not forget:

Investment in investee (“I” of “IN) = FV of common stock issued to acquire an investment + Any additional directs costs you had to endure to get that investment (finder's fee, legal fee)

Hope this helps.

AUD 78 Lost Credit, retake after FAR rematch
BEC 83 (Expires 2015-02-28)
FAR 71 Failed (2014-09-09), retake in Q4'14
REG 80 (Expires 2015-11-30)

[zkaraca2012]

@CPAHOPEFUL11, I'm doing the same thing. Going through the Wiley book and writing down every single journal entry I can put my eyes on.

Do you think maybe we can ‘reconcile' our notes towards mid September? I just want to make sure that all the journal entries known to human kind will be embedded in my brain, take and get this test done before mid October and never ever ever ever hear someone say FAR ever again.

AUD 78 Lost Credit, retake after FAR rematch
BEC 83 (Expires 2015-02-28)
FAR 71 Failed (2014-09-09), retake in Q4'14
REG 80 (Expires 2015-11-30)

[zkaraca2012]

@Revenue: Taxes are paid twice within the last 2 months of the year ($12,000 x 2 = $24,000). The taxes are going to become liability as there is a real estate recorded in the books. The real estate was acquired on 09/01, hence there're 4 months of accumulated liability on real estate tax.

$24,000/12 = $2,000 month tax applicable to a real estate.

$2,000 x 4 months of having a real estate = $8,000

J/E

DR: Real estate taxes payable $8,000

CR: Accrued tax expense $8,000

AUD 78 Lost Credit, retake after FAR rematch
BEC 83 (Expires 2015-02-28)
FAR 71 Failed (2014-09-09), retake in Q4'14
REG 80 (Expires 2015-11-30)

[rosssumner15]

Could someone help me out to understand the journal entry for moving a deferred tax benefit from OCI to the income statement?

JE to record classification of related deferred tax benefit ($300,000/20 years=$15,000) from OCI to income statement:

DR: Deferred Tax Benefit-OCI $15,000

CR: Deferred tax Benefit-income statement $15,000

I don't understand why there is a credit on the income statement. Wouldn't that cause the company to owe more income tax? In my mind it would make more sense that the income statement is debited $15,000.

Thanks!

FAR - 67-85
BEC - 75
REG - 78

[Anonymous]

Can someone please explain this to me in plain english:

On January 1, Year 1, Gearty Corporation loans Olinto Fabrix, Inc. $200,000 with a 10% simple interest note payable in ten years. Interest on the note is payable annually and the principal is due at the end of the term. On January 1, Year 3, Olinto has yet to pay any interest and approaches Gearty in the hope of renegotiating the terms. Gearty agrees, forgives the interest on the note accrued to date, and reduces the interest to 8 percent.

The following present value amounts are available.

Present Value of $1 Present Value of an Annuity

8% 10% 8% 10%

Eight years .540 .467 5.767 5.335

Ten years .463 .386 6.710 6.145

As a result of this troubled debt restructuring, Gearty should record:

a. A valuation allowance of $61,240.

b. Bad debt expense of $64,480.

c. An extraordinary loss of $56,100.

d. An extraordinary loss of $39,900.

The correct answer is A

[Lidis]

Ivy Co. operates a retail store. All items are sold subject to a 6% state sales tax, which Ivy collects and records as sales revenue. Ivy files quarterly sales tax returns when due, by the 20th day following the end of the sales quarter. However, in accordance with state requirements, Ivy remits sales tax collected by the 20th day of the month following any month such collections exceed $500. Ivy takes these payments as credits on the quarterly sales tax return. The sales taxes paid by Ivy are charged against sales revenue.

The following is a monthly summary appearing in Ivy's first quarter 20X1 sales revenue account:

Debit Credit

January $10,600

February $ 600 7,420

March 8,480

---

---

$ 600 $26,500

====== =======

In its March 31, 20X1, balance sheet, what amount should Ivy report as sales taxes payable?

A. $600

B. $900

C. $1,500

D. $1,590

[D C]

@rosssummer. DTA Is a benefit that let's you reduce tax expense. So you are correct in your thinking of the dr/cr for I/s however. To reduce income tax exp you should debit the I/s to apply the credit thus reducing your tax exp.

and as far as JEs for OCI instead if figuring out when to debit or credit it. I just thought about the account I did know about and do the opposite to OCI. In this case a debit to pull it out of OCI.

Hopefully that makes sense.

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.

[Lidis]

Answer according to NINJA MCQ

January sales tax was paid in February since tax was over $500 ($600).

$10,600 / 1.06 = $10,000 sales

$10,000 x .06 = $600 tax

February sales = Credit to sales / (1.00 + Tax rate)

= $7,420 / 1.06

= $7,000

February sales tax = $7,000 x .06

= $420

OR

= $7,420 – $7,000

= $420

March sales = Credit to sales / (1.00 + Tax rate)

= $8,480 / 1.06

= $8,000

March sales tax = $8,000 x .06

= $480

OR

= $8,480 – $8,000

= $480

Sales tax payable on 3/31/X1 = $420 + $480

= $900

[Anonymous]

Sure, I plan on taking the test by the first week of October. I will be done going through the book the second time around the 17th and by then should have all the JEs down before my final review for 14 or so days.

I'm not really good at any interest or dividend problems so those are two areas I will try to hammer down before the exam. And oh yeah, Government accounting doesn't have the easiest entries to get down either.

[rosssumner15]

@DC Thanks a lot! That cleared it up. I appreciate the help!

FAR - 67-85
BEC - 75
REG - 78

[nosleep135]

@CPA..one day

Calculate the pv as if it was at 8%:

.467 x 200,000 = 93,400

5.355 x 16,000 (200,000*.08) = 85,360

new value of loan is 93,400 + 85,360 = 178,760

(original NP – new value of NP) + original interest

(200,000 – 178,760) + 40,000 (200,000*.10*2yrs)

= 21,240 + 40,000 = 61,240

Hope this helps!

[Anonymous]

A state imposes a 5% tax on sales of goods by retail merchants. Legislation requires the state (provider) to remit one-sixth of the sales tax to cities and counties (recipients) on a quarterly basis. No annual appropriation is required. The cities and counties may use the resources for any governmental program.

When would the recipient recognize an asset?

A.

When the underlying transaction takes place

Incorrect B.

When all eligibility requirements have been met

C.

On a cash basis

D.

When the tax is collected

You answered B. The correct answer is A.

When a state (provider) shares a portion of revenues resulting from its sales tax with local governments (recipients), both provider and recipient governments should account for the event as a voluntary or government-mandated nonexchange transaction, as indicated by the specific situation. Thus, recipient governments would recognize an asset “when all eligibility requirements have been met or when resources are received, whichever is first.” Because the sharing is based on a continuing appropriation (no annual appropriation required), eligibility requirements are met as each sales transaction occurs.

GASB N50.130

So can someone tell me why B wasn't the answer here?

[Anonymous]

Studied all day on Governmental accounting and just got a 61% using Ninja MCQ. Welp, that certainly sucks.

[golfball7773]

I am doing the JE method this time as well and would be willing to share my compilation.

FAR: 63, 55, 62
REG: 65, 77*
AUD: Fail, 64, 71
BEC: 72, 74, 81

*expired

[Author]

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