[jeff]

NINJA Study Notes, Flashcards, and Audio: https://www.another71.com/products-page/

Wiley Software: https://www.another71.com/wiley-cpa-software/

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[Anonymous]

@CPA628

Thank you so much,,

I am having confused in FORM 1040 Individual Taxation,

Do we include Tax Exempt Interest in Form 1040 and then subtact afterwards OR We dont include TAX EXEMPT INTEREST?

I am confused ,please help me..

[Anonymous]

@ Cpa soon – Make sure you have a grasp on Ethics/Legal Responsibility and Business Law. All the SIMS are taxation.

Tax exempt interest is reported on Page 1 of the 1040 Line 8b, but is NOT included in your calculation of AGI.

[Anonymous]

@bamer101

Thank you so much..God Bless You

Any other important things, you think i should focus?

[Anonymous]

@Cpa soon – If you have the time, my advice would be to read the Wiley book front to back and then take as many MCQ as you can.

[Marivy22]

Feeling lost…

I have completed R1-R3 lectures. Tonight, I should be done with R3 MCQ's (50 to go). Considering that I have no clue/idea/experience with taxation, all the topics are ?!?!?!?! and working MCQ's OMG, so many details…..Hopefully, repetition will do the magic. I printed forms 1040 and 1120 to see if looking at the forms helps me with something. I am going to move forward with the lectures and will add progress test in the middle.

Wish me Luck!!!

Done 😉
Class of 2012!!!!
Lots of prayers and hard work....

[pdubsmaster]

Any ideas which sections of the exam are highly – limit to 2 main sections…Thanks everyone

AUD - [PASS]
BEC - [PASS]
REG - [PASS]
FAR - [PASS]

I'm on my way to a CPA!

[Irum0505]

bakerslky-What source did you use to study?

BEC: 54,76 (Credit expires 6/30/2012)
FAR: 80
REG: 5/12/2012
AUD: 71,70, (5/31/2012)

[musicamor]

Hargrove borrowed $40,000 as additional working capital for her business from the Old Town Bank. Old Town required that the loan be collateralized to the extent of 60%, and an acceptable surety for the entire amount be obtained. Prudent Surety Company agreed to act as surety on the loan and Hargrove pledged $24,000 of bearer negotiable bonds, which belonged to her husband, with Old Town. Hargrove has defaulted. Which of the following is correct?

A. Old Town must first proceed against Hargrove and obtain a judgment for payment before it can proceed against the collateral.

B. dent is liable in full immediately upon default by Hargrove, but will upon satisfaction of the debt be entitled to the collateral

C. Old Town must first liquidate the collateral before it can proceed against Prudent

D. As a result of the default, Prudent and Hargrove’s husband are cosureties.

Wiley says “D” is the correct answer but I thought that the surety must first exhaust efforts against the debtor before proceeding???

Texas CPA - licensed in 2012!!!

[musicamor]

Jason Manufacturing Company wished to acquire a site for a warehouse. Knowing that if it negotiated directly for the purchase of the property the price would be substantially increased, it employed Kent, an agent, to secure lots without disclosing that he was acting for Jason. Kent’s authority was evidenced by a writing signed by the proper officers of Jason. Kent entered into a contract in his own name to purchase Peter’s lot, giving Peter a negotiable note for $1,000 signed by Kent as first payment. Jason wrote Kent acknowledging the purchase. Jason also disclosed its identity as Kent’s principal to Peter. In respect to the rights and liabilities of the parties, which of the following is a correct statement?

• Jason, Kent, and Peter are potentially liable on the contract.

• Kent has no liability since he was acting for and on behalf of an existing principal.

• Peter is not bound on the contract since Kent’s failure to disclose he was Jason’s agent was fraudulent.

• Unless Peter formally ratifies the substitution of Jason for Kent, he is not liable.

Wiley says option 1 is correct but I thought that when a principal discloses to the 3rd party their identity, the agent is released from liability??

Texas CPA - licensed in 2012!!!

[Tina82]

musicamor

1st question should be “B” – did you go back to check wiley? surety is primarily liable so a creditor can go after debtor or surety in any order.

R - 74;88
A - 84
B - 74;89
F - no study = 67; May 15 = 87 & done

[Tina82]

2nd – when principal is undisclosed or partially disclosed agent is always liable. partially disclosed is when the party to contract knows that the agent is acting for the principal, but the principal identify is not disclosed. this is a confusing question to me to, but presumably the identity was disclosed after the contract was signed. so in that case the subsequent disclosure of principal doesn't affect agent's liability. let me know if you find something more on this.

R - 74;88
A - 84
B - 74;89
F - no study = 67; May 15 = 87 & done

[nolifecpa]

musicamor

question 1: i think answer D is correct (or just maybe a better answer out of the 4).

A is incorrect because Old town does not need to first obtain a judgment

B is incorrect because both Prudent and Hargrove are liable in full; even though Hargrove defaulted he is still liable

C is incorrect because Old town does not need to first liquidate the collateral

question 2: agents are liable for authorized deals and contracts unless the 3rd party discovers the identity of the principal and CHOOSES to hold the principal liable. only way to release an agent is with a novation

REG-65,71,74,73,70,74,79
BEC-60's,60's,69,71,76*,78
FAR-67,66,65,79
AUD-54,60's,65,83*,69,80
*expired

DONE

[Tina82]

I thought providing collateral only does not make you a surety so d can't be right. I still think B is correct. It doesn't say Hardgrove isn't liable, it just says P is fully liable on default.

For the second, they are all potentialy liable is still the best answer with the facs provided.

Please post if you find anything else, I would hate to lose points on these since I thought I got these right. For now I'm sticking to it.

R - 74;88
A - 84
B - 74;89
F - no study = 67; May 15 = 87 & done

[nolifecpa]

found it! @Tina82 is correct

B is the right answer because the essence of a surety arrangement is that the surety promises to perform upon default of the principal debtor. Further action by the creditor versus the principal debtor is not necessary (unlike a guarantor of collection). The surety, upon satisfaction of the principal debtor's obligation to the creditor, is subrogated to the creditor's rights in the collateral.

A incorrect incorrect because upon the default of Hargrove, the creditor (Old Town) is capable of immediately resorting to the collateral pledged. Old Town would not be required to proceed against Hargrove and obtain a judgment before resorting to the collateral.

C incorrect incorrect because the creditor need not resort to the collateral pledged; instead, s/he may proceed against the surety as soon as the obligation is due.

D incorrect incorrect because cosureties exist when more than one surety is bound to answer for the same obligation of a debtor. Prudent is the only surety; Hargrove's husband only provided the collateral.

REG-65,71,74,73,70,74,79
BEC-60's,60's,69,71,76*,78
FAR-67,66,65,79
AUD-54,60's,65,83*,69,80
*expired

DONE

[nolifecpa]

@musicamor

where did wiley say answer D was correct?

REG-65,71,74,73,70,74,79
BEC-60's,60's,69,71,76*,78
FAR-67,66,65,79
AUD-54,60's,65,83*,69,80
*expired

DONE

[Author]

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