[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

[Peterman25]

Aspiring – My thinking is that both of your thoughts are correct. You capitalize everything to get an asset in shape for its intended use and when it increases efficiencies. Increased efficiencies increases cash flows and you would want to deduct the expenses for the increased cash flows over time (matching).

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AZ license - Official 8/20/2015

[Peterman25]

I just wanted to pass this along just in case anybody else thought it useful..

When I studied BEC I always did NINJA MCQ sessions in sets of 30. Wasn't really a problem. I started that same way with FAR and at about 20-25 questions I just felt burnt out and like I was guessing for the last few questions. I read a recommendation on the forums here about reducing session to 20 questions. I find that strategy to be much better at learning. I am starting to retain more. Just a thought for those looking at different study tips..

BEC 7/14 - PASS
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AUD 1/15 - PASS
REG 4/15 - PASS

AZ license - Official 8/20/2015

[golfball7773]

I need a beer

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

*expired

[Anonymous]

Peterman is the answer A?

[Peterman25]

A is correct. Why?

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FAR 10/14 - PASS
AUD 1/15 - PASS
REG 4/15 - PASS

AZ license - Official 8/20/2015

[Anonymous]

i can't get over chapter 2 section 1 :@

Hate studying for this so i decided to move the exam to January.

[Anonymous]

The France Company owns a foreign subsidiary with 2,400,000 local currency units (LCU) of property, plant, and equipment before accumulated depreciation at December 31, year 3. Of this amount, 1,500,000 LCU were acquired in year 1 when the rate of exchange was 1.5 LCU to $1, and 900,000 LCU were acquired in year 2 when the rate of exchange was 1.6 LCU to $1. The rate of exchange in effect at December 31, year 3, was 1.9 LCU to $1. The weighted average of exchange rates which were in effect during year 3 was 1.8 LCU to $1. Assuming that the property, plant, and equipment are depreciated using the straight-line method over a 10-year period with no salvage value, how much depreciation expense relating to the foreign subsidiary’s property, plant, and equipment should be charged in France’s income statement for year 3? Assume the US dollar is the functional currency.

$126,316

$133,333

$150,000

$156,250

[Anonymous]

CPAHOPEFUL11 –

Is it B: $133,333, the weighted average of exchange rates which were in effect during year 3?

[Anonymous]

Brass Co. reported income before income tax expense of $60,000 for Year 2. Brass had no permanent or temporary timing differences for tax purposes. Brass has an effective tax rate of 30% and a $40,000 net operating loss carryforward from Year 1. What is the maximum income tax benefit that Brass can realize from the loss carryforward for Year 2?

A.

$12,000

Incorrect B.

$18,000

C.

$20,000

D.

$40,000

Jole Co. lent $10,000 to a major supplier in exchange for a noninterest-bearing note due in three years and a contract to purchase a fixed amount of merchandise from the supplier at a 10% discount from prevailing market prices over the next three years. The market rate for a note of this type is 10%. On issuing the note, Jole should record:

A.

Discount on note receivable: Yes; Prepaid asset: Yes

B.

Discount on note receivable: Yes; Prepaid asset: No

C.

Discount on note receivable: No; Prepaid asset: Yes

Incorrect D.

Discount on note receivable: No; Prepaid asset: No

---

Answers are ‘D' and ‘A', respectively. I read the explanation for each and still don't quite get it.

[Peterman25]

dmende – that is my thought process too. Since the assets are depreciated straight line the depreciation expense will be the same regardless of acquisition year. I would use an average exchange rate because depreciation and asset acquisition can happen at different times. Then again…my thought process and how it is really supposed to work can be two totally different things. B 133,333

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AUD 1/15 - PASS
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[Peterman25]

Isn't the answer to the Brass NOL carryforward A 12,000?

Explanation from the AICPA released questions….

Choice “a” is correct. Brass Co.'s Year 2 taxable income of $60,000 exceeds the $40,000 net operating

loss carryforward from Year 1, so the entire net operating loss carryforward can be utilized in Year 2. The

$40,000 carryforward will be used to offset $40,000 of Brass' taxable income, for an income tax benefit of

$12,000 ($40,000 x 30%).

BEC 7/14 - PASS
FAR 10/14 - PASS
AUD 1/15 - PASS
REG 4/15 - PASS

AZ license - Official 8/20/2015

[Peterman25]

On January 2, 20X1, West Co. issued 9% bonds in the amount of $500,000, which mature on January 2, 20X8. The bonds were issued for $469,500 to yield 10%. Interest is payable annually on December 31. West uses the interest method of amortizing bond discount. In its June 30, 20X1, balance sheet, what amount should West report as bonds payable?

A.

$469,500

B.

$470,475

C.

$471,025

D.

$500,000

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[Anonymous]

The answer was D actually.

And sorry I missed your post Peterman on the government question. Reciporcal transfers for are services rendered so that's why it was only 5,000. The transfer of general to enterprise is an operating transfer.

[Peterman25]

So it is the actual depreciation in the period divided by the actual exchange rate in the period.

150000/1.5 = 100000

90000/1.6 = 56250

$156,250

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AUD 1/15 - PASS
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[Anonymous]

Yep, I answered B as well.

[Author]

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