[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

[mb0363]

@ninja i think it is both. 1.When you spend you can only spend unrestricted assets. decrease in temp restricted and increase in unrestricted 2. says no restrictions….

BEC - PASS
AUDIT - PASS
REG - PASS
FAR - PASS

[Mehwish]

@mb, wouldn't it decrease Unrestricted assets too as soon as its spent…?

[salring]

@Mehwish sorry am very slow today but I still don't get it.

The question says they share profits and loss equally so if the profit is $4K why are they deducting it before allocating the interest. Aren't they supposed to allocate it first then allocate whatever is left?

[salring]

@MB0363 I don't think I is unrestricted but again I am not sure, I think it moves from restricted to temporary restricted to spent but I could be wrong.

[Mehwish]

@hudnetj

What is the actual question? Is the question asking for Actual return? Expected return? Or pension expense?

According to Wiley book, they use the Actual Return (Decrease in Pension Expense), and than they also have a deferral of gain/loss(When Actual is different than expected return)…

So the net effect on the pension expense is technically the expected return

In the wiley book, they listed Actual Return as a component of the Pension Expense, but at the end they ended up adding the gain (listed as a deferral gain) and it ended up being same as just subtracting Expected Return.

I'm not sure how other books list the concept, but that's how it was in the book.

So, you subtract of $140, but than you add a deferral gain of $28….Which would be the same as subtracting of the expected return $112.

[mb0363]

@mehwish and @salring i guess we should wait for ninjas reponse! i was 100% sure you can't spend temporarily restricted assets.

I'm actually trying to understand the NFP entries right now. I'm getting confused with the reclassification from temporarily restricted to unrestricted when you spend and how to book.

JE's:

DR TR

CR UN

DR Expense

CR Cash

are these correct? if so that would mean decrease in TR and Increase in UN

BEC - PASS
AUDIT - PASS
REG - PASS
FAR - PASS

[Future Ninja]

Thanks guys. The answer is II only. My first answer was both I and II. Now I'm confused. Isn't when the restricted asset received prior year will become unrestricted on the year it was spent?

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

[mb0363]

I was understanding NFP the way future ninja was. Confused as well. thought a reclassification was needed….

BEC - PASS
AUDIT - PASS
REG - PASS
FAR - PASS

[Future Ninja]

@Mehwish and @salring – am i mssing something here. becker answered II only. but why. is it because it was spent on public health education. ^_^

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

[Mehwish]

@Sarling,

It's okay. Maybe it's the way I am explaining it.

First thing, the problem said interest is earned the average capital balance accounts. And second it says RESIDUAL P/L is divided equally. Right now NI is only $4000, but its going to change as we allocate interest on the average capital balance of both of the partners.

The Average Capital Balances are

Y:$160,000

Interst-160,000*.10=16,000

Z:$100,000

Interest-100,000*10=10000

Total Interest: 10,000+16,000=26,000

This interest Increase the capital accounts, but also decrease the net income.

New Net Income :(26,000)+4000=(22,000)

Net Income Allocation (22,000)/2=(11,000)

Y's Net Change in the account= 10,000+(11,000)= (1000)

If it makes it easy, think of it as allocating salaries. Once you allocate salaries, it decreases your net income. And the remainder of the income is allocated equally.

I would like to know your calculations, and how you are getting $1000.

[Future Ninja]

did you know that:

If NFP do not use expense classification in the operating statement, such NFP must provide “FUNCTIONAL” in the notes.

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

[Mehwish]

If there was some sort of time limit on it, like it can only be spend after year 2…than after year 2 the donation would goto unrestricted assets. And if the donation was not spent in year 3, than it would remain in unrestricted asset.

But there is no time restriction, and the donation was spent

So it went from Temp Asset—>Unrestricted Asset—> No asset.

It's gone. There is nothing to classify as unrestricted or restricted,

That's how I understood it.

[salring]

@Ninja, my understanding is if assets are received with restrictions they will always remain restricted until spent. When restricted assets are spent on the obligation they were supposed to fulfill, they will be considered temporarily restricted while fulfilling the obligation and when the task is complete they are spent therefore causing a reduction in temporary restricted assets.

[salring]

@Mehwish

ahhhhh the light bulb finally came on, I was doing it all wrong, instead of remembering that the new addition to his capital balance of $12,000 is higher than the remaining $11,000 that needs to be allocated. He is owed more than is available to be distributed.

Thank you!!!!

[mb0363]

@salring @ninja @mehwish ohhhh was it asking for this year? and because it was spent last year, this year it is nothing? seems like no matter how many mc i do i always forget to check the dates =

BEC - PASS
AUDIT - PASS
REG - PASS
FAR - PASS

[Author]

Replies