[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]

If my test is on the 25th and I buy and start ninja thursday…is that enough time?

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

[Gabe]

@mb how much time do you have to devote to it?

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

[mb0363]

@gabe. 24 hours a day. Silly to even question it, so I bought it. I am currently finishing my second review on Bonds (Today), and Becker Chapter 7 (Wednesday). Which would leave me with Chapters 1,2,4,10 left. & I'm not sure I really need a second review of these…

This is my second Stab at Far.

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

[Gabe]

Yeah this is my third stab at FAR. I memorized all of Becker so I have been using Ninja. If anything it is good to see different questions/sims.

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

[mb0363]

Man these bonds are giving me SO much anxiety. I continue to miss them because little details i overlooked (dates, accrued interest,etc). Time to hit the gym and tackle the last half tonight.

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

[Gabe]

@mb same here. Just keep going at it.

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

[Ssbknyc]

For Year 1, Clark Corp. reported depreciation of $300,000 in its income statement. On its Year 1 income tax return, Clark reported depreciation of $500,000. Clark's income statement also included $50,000 accrued warranty expense that will be deducted for tax purposes when paid. Clark's enacted tax rates are 30% for Year 1 and Year 2, and 25% for Year 3 and Year 4. The depreciation difference and warranty expense will reverse over the next three years as follows:

Depreciation difference Warranty expense

Year 2 $ 80,000 $ 10,000

Year 3 70,000 15,000

Year 4 50,000 25,000

$ 200,000 $ 50,000

These were Clark's only temporary differences. In Clark's Year 1 income statement, the deferred portion of its provision for income taxes should be:

a. $67,000

b. $37,500

c. $41,000 ANSWER

d. $45,000

Anyone can help me with this? Particularly how warranty plays into this?

Done 08/2014-08/2015

[mccaberp]

@SSBKNYC

You determine DTL / DTA by multiplying the enacted tax rate in the year the temporary differences are expected to reverse. In this case they are reversing in increments so you multiply those incremental reversals by their respective enacted tax rates.

Warranty expense is a temporary difference because, for financial statement purposes, you must expense and accrue the liability immediately if it can be reasonably estimated. However, the IRS doesn't allow organizations to recognize such an expense and will only allow the deduction from taxable income to be taken when it is paid – the question even states this ,”Clark's income statement also included $50,000 accrued warranty expense that will be deducted for tax purposes when paid.” Because warranty expense is going to be a FUTURE DEDUCTION in taxable income it is considered a Deferred Tax Asset.

AUD: Pass
REG: Pass
BEC: Pass
FAR: Pass

First try CPA. Thank god. God bless America.

[mb0363]

The Facts tell you the Tax Depreciation is in Excess of Accounting Depreciation = Def Tax Liability. They also tell you that we deducted warranty expenses for Accounting, but not for The tax return

= Def Tax Asset. Thats why we subtracted the two differences instead of adding them. Obviously if they were both DTA's or DTL's you would add them. You then apply the appropriate enacted tax rates.

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

[Ssbknyc]

Thanks @mb0363.. i had this down last week but got more confusing this week.. when you say “They also tell you that we deducted warranty expenses for Accounting, but not for Income Statement = Def Tax Asset.”

Do you mean “but not for Tax Return”?

Done 08/2014-08/2015

[Gabe]

What's the calculation for the 41k?

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

[mb0363]

Yes! That's what I meant. So sorry for the confusion.

I understand 100% so hard to keep the material fresh.

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

[mb0363]

Try to keep in mind what your future taxable income will look like. If it's lower than accounting = asset. Higher = liability

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

[Anonymous]

Hi! I'm sure this is review for you guys, bit can anyone help with this question?

Question says:

Year 2 estimated operating loss was $500,000, and fair value of facility was $300,000 less than carrying amount for year 1.

Year 2 estimated operating loss turned out ot be correct, Year 1 operating loss was $1,400,000, and the division was actually sold for $400,000 less than the carrying value. Effective tax rate is 30%.

What should be reported in income statement as year 2 loss from discontinued ops.?

Answer is $420,000 (500,000+100,000)*70%.

I get that the the $500,000 from the operating loss is included, but I don't understand why the loss on disposal amout is $100,000… Is it because the $400,000 was an additional $100,000 than the prior year's $300,000 impairment loss? If so, why?

Thanks!

[salring]

@ Gabe,

80,000-10,000=70,000X30% = 21,000

70,000-15,000 = 55,000 X 25% = 13,750

50,000 – 25,000 = 25,000 X 25% = 6,250

21,000+13,750 +6,250 = 41,000

[Author]

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