REG Study Group Q1 2015 - Page 56

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  • January 14, 2015 at 2:52 am #651871
    The_AmYam
    Member

    Mika… I'd agree with you so perhaps someone else can shed some light on it?

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    January 14, 2015 at 3:04 am #651872
    Gabe
    Participant

    My good friend Google pulled this result from A71 thread a few months ago…

    “wine was the original purchaser who then sold to jacobs. jacobs would have been safe from repossession had mjc not filed to perfect the security interest. This is because by filing, mjc put all on notice there was a security interest. Note that mjc did not need to file to perfect; however, by doing so, they preserved their rights against second hand consumers like jacobs. This falls under the “garage sale” rule.

    you are correct that a buyer in ordinary course of business is protected against perfected security interest. A buyer in ordinary course of business is protected against the seller's supplier attempting to repossess goods. For ex, if you buy a tv from best buy, and best buy screwed samsung over, samsung cannot come to your house and repossess your tv bc you were a buyer int he ordinary course of business.”

    So basically…garage sale rule.

    Edit to add link to discussion: https://www.another71.com/cpa-exam-forum/topic/reg-study-group-q4-2014/page/4

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

    January 14, 2015 at 3:30 am #651873
    Mika
    Participant

    @Gabe, thanks for the explanation.

    Garage Sale Rule: consumer to consumer sales: A buyer takes free of the SI if he buys w/out knowledge of the SI, for value, and for his own personal, family or household purposes, UNLESS prior to the purchase the SP has filed a financing statement covering such goods. The goods must be consumer goods in the hands of both buyer and seller.

    So if someone buy things in a garage sale and if the things he/she bought has been secured (by filing a financing statement), the secured creditor can take back the goods?

    REG - 80 (02/13/2015) Roger + Ninja Flash Card + Ninja MCQ + Becker's Note
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    January 14, 2015 at 3:35 am #651874
    Gabe
    Participant

    @Mika that is my understanding.

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

    January 14, 2015 at 5:07 am #651875
    funtiks
    Participant

    whats the difference between schdule K and k-1 im confused

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    AUD - 72, 71, 90
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    AFTER 3 YEARS I'M DONE!!!

    January 14, 2015 at 5:16 am #651876
    s2sylvir
    Member

    @funtiks

    Sch K is a total of all items on the K-1s for each partner.

    If there are 10 partners, there are 10 K-1s, and the amounts of ordinay income, rental income, etcetc on all 10 K-1s is the same as the one Sch K which is filed at the entity level.

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    January 14, 2015 at 5:17 am #651877
    s2sylvir
    Member

    Sharing this with everyone as well: Oh how good of a distraction it is…..

    https://howshouldweaccountforme.tumblr.com/

    BEC - PASS (79)
    AUD - PASS (63, 71, 74, 74, 83)
    REG - PASS (88)
    FAR - PASS (58, 89)

    Becker for all + FAR 10 Point Combo

    January 14, 2015 at 5:28 am #651878
    funtiks
    Participant

    thanks

    FAR - 76*, 73, 85
    BEC - 69, 72, 78*, 80
    AUD - 72, 71, 90
    REG - 71, 74, 85

    AFTER 3 YEARS I'M DONE!!!

    January 14, 2015 at 6:03 am #651879
    Anonymous
    Inactive

    Perle, a dentist, billed Wood $600 for dental services. Wood paid Perle $200 cash and built a bookcase for Perle's office in full settlement of the bill. Wood sells comparable bookcases for $350. What amount should Perle include in taxable income as a result of this transaction?

    a.

    $550

    b.

    $600

    c.

    $200

    d.

    $0

    Hey so i know this is a simple question but i just want to clear any confusions. So COD is considered income so what would the 50 dollars that Perle didnt get be considered? Also would Wood subtract $50 of his taxable income because of COD

    January 14, 2015 at 6:50 am #651880
    s2sylvir
    Member

    @cpasucks23

    I would assume Perle would only report a net of $550 income. Perhaps he'll write off the $50 as uncollectibles. Perhaps he simply records $550 of income upon receipt (cash basis). Perhaps he had it on A/R, then he'd reverse out $600 from A/R, credit $550 as income and $50 as bad debt.

    I highly doubt it's a cancellation of debt.

    I guess he could sue Wood for the $50 he didn't get since Wood did not fulfill his end of the contract for a full $600.

    BEC - PASS (79)
    AUD - PASS (63, 71, 74, 74, 83)
    REG - PASS (88)
    FAR - PASS (58, 89)

    Becker for all + FAR 10 Point Combo

    January 14, 2015 at 6:55 am #651881
    s2sylvir
    Member

    Oops, this comment is wrong, “Perhaps he had it on A/R, then he'd reverse out $600 from A/R, credit $550 as income and $50 as bad debt.”

    If it's accrual basis, he would have already recorded $600 as income. Upon receipt it would be $600 to A/R, $550 to cash/property, $50 to discounts or something similar, thus effectively it's still $550 of income reported.

    BEC - PASS (79)
    AUD - PASS (63, 71, 74, 74, 83)
    REG - PASS (88)
    FAR - PASS (58, 89)

    Becker for all + FAR 10 Point Combo

    January 14, 2015 at 12:40 pm #651882
    NJPRU
    Member

    reeeeallly enjoying R5! haha. so refreshing to hear Peter's voice!

    Also, Im not sure if you guys have checked it out yet, but there's a pretty awesome REG Study facebook group out there. I just joined it a couple of days ago. It's nice while your “bored” at work and need a break from work and your on fb and then a question pops up in your news feed. lol

    Glad to see everyone is doing well in this thread! Gabe, best of luck with your studying! I've been extremely busy with busy season and all here at work, sorry I havent checked in.

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    January 14, 2015 at 2:04 pm #651883
    Gabe
    Participant

    @nj thanks! And yes I am also on the fb club. In fact, when I open fb I automatically go to that group. I think there are a few a71people there. I see ninja questions a lot. Good luck with your studies as well!

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

    January 14, 2015 at 3:39 pm #651884
    funtiks
    Participant

    @ NJPRU

    I know how you feel lol.

    I'm finishing up estates this week, but I already started watching the R5 lectures, and its refreshing.

    How do you guys attack Blaw?

    I take crazy amount of notes for tax, close to rewriting the book in my own words, but I feel like with only 6 weeks left it would be a waste of time to do the same for blaw.

    FAR - 76*, 73, 85
    BEC - 69, 72, 78*, 80
    AUD - 72, 71, 90
    REG - 71, 74, 85

    AFTER 3 YEARS I'M DONE!!!

    January 14, 2015 at 3:41 pm #651885
    Gabe
    Participant

    @funticks I read over the chapter then attacked the mcqs. Repetition is key. Then rewrite the questions I got wrong.

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

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