[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

[Future Ninja]

@mb. we're in the same boat. I'm struggling now. thanks to @salring and @mehwish. awesome guys! many thanks.

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

[ron10590]

In the statement of cash flows, why is bond amortization included in the operating section and not the financing section?

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

[ron10590]

Oh, I think it's because the under the indirect method, the operating section includes adjustments for current assets and liabilities, and the amortized part of the bond is considered a current liability.

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

[Future Ninja]

guys, im lost here in classifying which one is an asset or not. in determining existence of an asset, the right of ownership is essential?

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

[lab2008]

I am currently trying to learn cost method, equity method, consolidation and acquisition method. Currently working problems on acquisition method. I noticed a lot of them are asking for what the consolidated amounts will be for various items such as consolidate R/E, Income, APIC, etc will be under the acquisition method. I understand APIC is investment in subsidiary less common stock, you have to used the R/E formula to get income, R/E are same as parents (one of the only things I remembered from my masters classes), at acquisition date, consolidated S/H equity equal parents S/H equity, but at year end it is (CS, APIC, NCI, and RE.)

Soo my question is just if i'm basically understanding all of these right. I think I missed assets which is the parents assets plus the increase in FV of the assets acquire by subsidiary.

AND on the below question. at the very bottom the solution is Consolidated net income is the same as parent company net income, when the equity method is used. Is this a typo? I was expecting it to ask for acquisition method. Is there something in the question that tells me it's equity, and if so is there a difference between consolidate equity method and acquisition method income, or even such a thing as consolidated equity method income? Thanks!!!

Consolidated net income is the same as parent company net income, when the equity method is used.

The separate condensed balance sheets and income statements of Purl Corp. and its wholly-owned subsidiary, Scott Corp., are as follows:

Balance Sheets

December 31,Year 1

Purl

Scott

Assets

Current assets

Cash $ $80,000 $ $60,000

Accounts receivable (net) 140,000 25,000

Inventories 90,000 50,000

Total current assets 310,000 135,000

Property, plant, and equipment (net) 625,000 280,000

Investment in Scott (equity method) 400,000 −

Total assets $ 1,335,000 $ 415,000

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable $160,000 $95,000

Accrued liabilities 110,000 30,000

Total current liabilities 270,000 125,000

Stockholders' equity

Common stock ($10 par) 300,000 50,000

Additional paid-in capital − 10,000

Retained earnings 765,000 230,000

Total stockholders' equity 1,065,000 290,000

Total liabilities and stockholders' equity $ 1,335,000 $ 415,000

Income Statements

Year Ended December 31, Year 1

Purl

Scott

Sales $ 2,000,000 $ 750,000

Cost of goods sold 1,540,000 500,000

Gross margin 460,000 250,000

Operating expenses 260,000 150,000

Operating income 200,000 100,000

Equity in earnings of Scott 70,000 −

Income before income taxes 270,000 100,000

Provision for income taxes 60,000 30,000

Net income $ 210,000 $ 70,000

Additional information:

•On January 1, Year 1, Purl purchased for $360,000 all of Scott's $10 par, voting common stock.

•On January 1, Year 1, the fair value of Scott's assets and liabilities equaled their carrying amount of $395,000 and $145,000, respectively, except that the fair values of certain items identifiable in Scott's inventory were $10,000 more than their carrying amounts. These items were still on hand at December 31, Year 1.

•During Year 1, Purl and Scott paid cash dividends of $100,000 and $30,000, respectively. For tax purposes, Purl receives the 100% exclusion for dividends received from Scott.

•There were no intercompany transactions, except for Purl's receipt of dividends from Scott and Purl's recording of its share of Scott's earnings.

•Both Purl and Scott paid income taxes at the rate of 30%.

•During Year 1, there was no impairment of goodwill.

In the December 31, Year 1 consolidated financial statements of Purl and its subsidiary, net income should be:

a.

$270,000

b.

$210,000

c.

$190,000

d.

$170,000

Explanation

Choice “b” is correct, $210,000 net income. Consolidated net income is the same as parent company net income, when the equity method is used.

3 out of 4 passed and sitting for FAR on May 31. Will lose credit for Audit if I don't pass FAR by Aug 4. I love leases and bonds.

[Future Ninja]

I hate IFRS. makes my life more complicated. nighty night everyone.

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

[Future Ninja]

6am. 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,

[lab2008]

8:39 am rise and study 🙂

3 out of 4 passed and sitting for FAR on May 31. Will lose credit for Audit if I don't pass FAR by Aug 4. I love leases and bonds.

[Gabe]

Been looking over AICPA released questions and came on a stock dividend question…

If it is a large stock dividend (>20-25%) you use PAR value (as in I got a big dividend so we're going to PARty)

If it is a small stock dividend (<20%) you use FV (as in I got a small dividend, it's FAIRly ok)

Here's the question for those interested:

A company whose stock is trading at $10 per share has 1,000 shares of $1 par common stock outstanding when the board of directors declares a 30% common stock dividend. Which of the following adjustments should be made when recording the stock dividend?

a. Treasury stock is debited for $300.

b. Additional paid-in capital is credited for $2,700.

c. Retained earnings is debited for $300.

d. Common stock is debited for $3,000.

(Answer is C)

DR RE 300 (PV)

CR C/S to be distributed 300

Hope this helps someone on test day 🙂

Anyone else have ways to help them remember things? (aside from Becker's)

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

[Gabe]

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

[Troblin]

Can someone help walk me through this question? I see the ninja notes explanation, but I'm still not grasping it conceptually.

The following information is relevant to one of the City of Mullins' General Fund's derived tax revenues:

Fiscal year-end June 30

Beginning receivables $450,000

Beginning deferred revenues 100,000

Beginning allowance for doubtful accounts 50,000

Receipts 1,250,000

Ending receivables 600,000

Receivables collected 6/30 – 8/30 125,000

Ending allowance for doubtful accounts 60,000

The City of Mullins considers derived tax receivables collected within 60 days after the close of the fiscal year to be “available.” Furthermore, the City wrote off $30,000 of receivables as uncollectible during the year.

What would be the amount of revenues reported at the fund level?

A.

$1,400,000

Incorrect B.

$1,390,000

C.

$965,000

D.

$1,075,000

FAR: 85(11/22/2014) - Becker(full)/Ninja MCQ (5 day cram)
AUD: 79 (2/1/2015) -Becker/Ninja MCQ/Ninja Notes
REG: 84(4/19/2015) -Becker/Ninja MCQ/Ninja Notes
BEC: 83 (7/13/2015) -Becker/Ninja MCQ/Ninja Notes

Date I Got My Life Back!: 8/4/2015 🙂

[Mehwish]

^ Yeah, these problems are really complicated. I missed all of these types on the NINJA MCQ. I even made a separate topic about it, but never really understand when you recognize the revenue.

It would be great if someone can help!

[Ssbknyc]

For those using Becker progress tests, I am unable to access my “saved” tests, which are previously taken progress tests. Anyone else having the same issue?

Done 08/2014-08/2015

[Determined CPA]

Ssbknyc – I just tried and mine is working fine

Why is RE reduced when a property dividend is declared? Can someone please walk me thru the logic instead of me memorizing that fact. thanks!!

A - 75
B - 78 God is good.
F - 77 Answered prayers.
R - 84! Done!!

Paperwork sent - waiting for license!!
Still on a cloud and in shock. Through God, all things will happen.

[mb0363]

Why are the calculations different? 1st one uses the temp difference in year 2 and ignores the cumulative. and the second uses the cumulative and ignores the temporary difference.

Quinn Co. reported a net deferred tax asset of $9,000 in its December 31, Year 1, balance sheet. For Year 2, Quinn reported pretax financial statement income of $300,000. Temporary differences of $100,000 resulted in taxable income of $200,000 for Year 2. At December 31, Year 2, Quinn had cumulative taxable differences of $70,000. Quinn's effective income tax rate is 30%. In its December 31, Year 2, income statement, what should Quinn report as deferred income tax expense?

a. $21,000

b. $60,000

c. $30,000 CORRECT

d. $12,000

VS

Kent, Inc.'s reconciliation between financial statement and taxable income for Year 2 follows:

Pretax financial income- $ 150,000

Permanent difference- (12,000) = 138,000

Temporary difference-depreciation (9,000) =129,000

Additional information:

Cumulative temporary differences (future taxable amounts)

12/31/Year 1 $11,000

12/31/Year 2 $20,000

The enacted tax rate was 34% for Year 1 and 40% for Year 2 and years thereafter.

In its December 31, Year 2, balance sheet, what amount should Kent report as deferred income tax liability?

a. $3,600

b. $8,000 CORRECT

c. $6,800

d. $7,340

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

[Author]

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