[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

[salring]

Q3 Same calculation as 1 & 2

1,000,000 X .683 = 683,000

1,000,000 X 9% = 90,000 X 3.17 = 285,300

BV = 285,300 + 683,000 = 968,300

4,100,000 X 1/4 = 1,025,000

1,025, 000 – 968,300 = 56,700 As the equity. Does anyone come have the solution to this problem?

[juuustin]

On January 1, Year 1, a shipping company sells a boat and leases it from the buyer in a sale-leaseback transaction. At the end of the 10-year lease, ownership of the boat reverts to the shipping company. The fair value of the boat, at the time of the transaction, was less than its undepreciated cost. Which of the following outcomes most likely will result from the sale-leaseback transaction?

Nevermind the answers ( I actually got it right), I am mightily confused about the reasoning behind the answer given in NINJA.

“Since the lease does not meet any of the criteria for capitalization, the lease is accounted for as an operating lease.”

How in the world does the lease not meet any criteria for capitalization? The second line says that the ownership of the boat reverts back to the shipping company at the conclusion of the lease. Isn't that the number 1 reason for something to be a capital lease?

MD Candidate: 10/1/14

FAR - 87 (11/23/14)
REG - 87 (1/30/15)
BEC - 89 (4/19/15)
AUD - 98 (5/30/15)

Ethics - 100

Experience - In Progress!

[Gabe]

@juuustin I thought the EXACT same thing when I saw that question.

CPA, CFE
CISA- Experience will be completed by August 2016

[Future Ninja]

5am. rise and grind!

AUD - 79 (expired) retaking July 28,2016
FAR - 76 expiring July 31, 2016
BEC - 85
REG - 74,74,74,74,59,70,

[Future Ninja]

If I pass FAR on my first try, I'm gonna dance this:

https://www.youtube.com/watch?v=D7fVHo-xjF0

AUD - 79 (expired) retaking July 28,2016
FAR - 76 expiring July 31, 2016
BEC - 85
REG - 74,74,74,74,59,70,

[Future Ninja]

before going to work, who's studying this early mornin?

AUD - 79 (expired) retaking July 28,2016
FAR - 76 expiring July 31, 2016
BEC - 85
REG - 74,74,74,74,59,70,

[Future Ninja]

Here are the answers to my previous post:

1. B

2. C

3. C

4. A

Journal entries:

01/01 year 1:

Cash $4,100,000

Discount on Bonds Payable $ 126,800

Bonds payable $4,000,000

Equity – for conversion option $226,800

12/31 year 1:

Interest Expense $360,000

Cash $360,000

Interest Expense $27,320

Discount on Bonds Payable $27,320

12/31 year 2:

Interest Expense $360,000

Cash $360,000

Interest Expense $ 30,052

Discount on Bonds Payable $30,052

Bonds Payable $1,000,000

Equity – conversion 56,700

Discount on Bonds Payable $ 17,357

Cash $1,000,000

Gain on retirement of debt (I/S) $12,643

Gain on cancellation of equity(B/S) $ 26,700

AUD - 79 (expired) retaking July 28,2016
FAR - 76 expiring July 31, 2016
BEC - 85
REG - 74,74,74,74,59,70,

[Future Ninja]

did you know that:

Proprietary funds (SE) must use the direct method when preparing their S of CF.

AUD - 79 (expired) retaking July 28,2016
FAR - 76 expiring July 31, 2016
BEC - 85
REG - 74,74,74,74,59,70,

[hudnetj]

@ninja would never get that question right if i saw that on the exam

BEC - 76
REG - 76
FAR - 77
AUD - 63, 89

DONE!!

CPA 3/15

[ron10590]

On January 1, year 1, West Co. entered into a ten-year lease for a manufacturing plant. The annual minimum lease payments are $100,000. In the notes to the December 31, year 2 financial statements, what amounts of subsequent years' lease payments should be disclosed?

Answer:

amount for appropriate required period: $500,000

aggregate amount for the lease term: $800,000

The $800,000 makes sense (remaining minimum lease payments), but could someone please explain the $500,000?

REG (7/14): 82
FAR (11/14): 81
BEC (1/15): 83
AUD (5/15):

[juuustin]

Ron: I am pretty sure the $500,000 just comes from the FASB requirement to disclose five years of lease payments.

MD Candidate: 10/1/14

FAR - 87 (11/23/14)
REG - 87 (1/30/15)
BEC - 89 (4/19/15)
AUD - 98 (5/30/15)

Ethics - 100

Experience - In Progress!

[Gabe]

@juustin Yep! Just did this disclosure yesterday

CPA, CFE
CISA- Experience will be completed by August 2016

[Gabe]

Thanks@Ninja. Printing the problem out now to study it this weekend.

CPA, CFE
CISA- Experience will be completed by August 2016

[Gabe]

Anyone have a handy way to remember what is imposed tax revenue versus derived revenue? I can never seem to sort out the two.

CPA, CFE
CISA- Experience will be completed by August 2016

[Gabe]

Gold County received goods that had been approved for purchase but for which payment had not yet been made. Should the accounts listed below be increased?

Encumbrances Expenditures

a. No Yes

b. Yes No

c. No No

d. Yes Yes

The answer is A…but what are the JEs? I thought when a PO is approved it is:

DR encumb

CR reserve for encumb

so wouldn't encumb increase?

CPA, CFE
CISA- Experience will be completed by August 2016

[Author]

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