[jeff]

Welcome to the Q1 2017 CPA Exam Study Group for REG. 🙂

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

[HoosierCPA]

@aatoural somewhat. I was hoping to combine info from the corp sections and parternship sections. I didnt know if someone had their own notes they would like to share. I know the rules but from time to time I mix them up.

FAR - 78
REG - 72,74,71...please just go away REG nobody likes you!
BEC - 82
AUD - Aug 16

[RE2PECT]

@dtatham10

FAR: 75 Roger & Ninja (notes/flashcards/audio/MCQ)
AUD: 73, 81
BEC: 71, retake 8/29
REG:

[HoosierCPA]

Post edited – please read the forum rules:

https://www.another71.com/cpa-exam-forum/topic/cpa-exam-forum-faqs-and-help-center/

We aren’t trying to be sticklers – just consistent.

– Mod NINJAs

FAR - 78
REG - 72,74,71...please just go away REG nobody likes you!
BEC - 82
AUD - Aug 16

[aatoural]

I have one as well but is in my work's computer. I think re2pect will hop you faster today.

I have this question. I know why is A but, Why not D?

Able hired Carr to restore Able’s antique car for $800. The terms of their oral agreement provided that Carr was to complete the work within 18 months. Actually, the work could be completed within 1 year. The agreement is
A. Enforceable because the work could be completed within 1 year. CORRECT
B. Unenforceable because it covers a time period in excess of 1 year.
C. Unenforceable because it covers services with a value in excess of $500.
D. Enforceable because personal service contracts are exempt from the statute of frauds.

BEC - PASSED
AUD - 8/29/16
FAR - TBS
REG - TBS

[HoosierCPA]

@aa I need to look at the rules but A and D conflict each other. If you are using the under 1 year rule then you are applying the statute of frauds rules MYLEGS…Y is performed in less then a year.

D says exempt from statute of frauds so essentially saying the statute of frauds doesn't apply in this scenario. Without going back to the book I believe its the service can be performed in less then a year is the statute of frauds rule so because of that A would be right and D would be incorrect.

FAR - 78
REG - 72,74,71...please just go away REG nobody likes you!
BEC - 82
AUD - Aug 16

[aatoural]

dtatham10 -I might be reading it wrong, to me it meant that since it was services it did not follow the rules of the statute of fraud. But is tricky because is services plus performed within a year.

BEC - PASSED
AUD - 8/29/16
FAR - TBS
REG - TBS

[HoosierCPA]

I would say its just a wording trick it reads like its only exempt because its a personal service contract which isn't true. It's exempt because its a personal service contract AND it can be performed within a year. I think leaving out the last part make the answer wrong.

FAR - 78
REG - 72,74,71...please just go away REG nobody likes you!
BEC - 82
AUD - Aug 16

[norseman88]

Can someone please explain why Interest Income is a separately stated item for S corps but Interest Expense is a non-separately stated item.

Thank you.

[HoosierCPA]

@norseman88 I've struggled with that one as well. Interest income is a portfolio or investment type income, these items are taxed different. Think of interest expense as interest you would pay on your mortgage or loan from your bank, this is more of an ordinary item that would not need to be separately stated. Someone much smarter then me explained this to me last quarter but I am trying my best to pass it along as best I can ;).

FAR - 78
REG - 72,74,71...please just go away REG nobody likes you!
BEC - 82
AUD - Aug 16

[HoosierCPA]

Ooops looks like I broke some rules earlier! Honest mistake, sorry for getting you in trouble @re2pect!!!

FAR - 78
REG - 72,74,71...please just go away REG nobody likes you!
BEC - 82
AUD - Aug 16

[norseman88]

@dtathahm10 Thanks for the reply. I think that helps a little bit and I just need to remember that on the exam, interest expense will not be separately stated.

I struggle with this as there is nothing separately stated for investment expense, which should reduce the amount of investment income (investment interest).

[wakefern58]

Could someone help explain this one to me regarding C Corp Bonus Expenses? Thanks! The answer is 610,000 but I am still trying to wrap my head around this one.

Soma Corp. had $600,000 in compensation expense for book purposes in Year 1. Included in this amount was a $50,000 accrual for Year 1 nonshareholder bonuses. Soma paid the actual Year 1 bonus of $60,000 on March 1, Year 2. In its Year 1 tax return, what amount should Soma deduct as compensation expense?
a.

$600,000
b.

$550,000
c.

$610,000
d.

$540,000

[Ryan]

The $50K accrual is an estimate. Actual year 1 bonus paid in year 2 was $10K more than the estimated accrual.

Credit Acrrued Expense 10K
Debit Comp Expense 10K

600+10=610

[HoosierCPA]

@waker to add the bonus payment was made before the April 15th filing date. Had the payment been made after the filing date the extra 10k paid in bonuses would fall under year 2. Since it came before the filing date they were allowed to retroactively include it into year 1.

FAR - 78
REG - 72,74,71...please just go away REG nobody likes you!
BEC - 82
AUD - Aug 16

[lindseyoswalt]

Just joined this website. And I took reg for this first time this morning.

I really have no clue how I did but hopeful I won't have to retake it!

[Author]

Replies