[jeff]

Welcome to the Q2 2016 CPA Exam Study Group for REG.

Some BLITZ videos to help your exams: https://www.another71.com/ninja-blitz

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

[Spartans92]

I have it on Aug 5 right before I start work. Hopefully, taking it one time so I can focus on FAR before Busy season. I know Audit would be much easier to study for during tax season since no math involved.
Good luck to you claudia!

BEC- PASS

[Just3Letters]

You start work in August Spartans? Only a month after me!

FAR- 81
REG- 81
BEC- Aug 22, 2016
AUD- TBD

[Spartans92]

Yessir! I am excited yet nervous at the same time haha. I set the goal of knocking 2 out by the time I start work so hopefully I can fulfill that.

R3 sucks! I just wanna throw this book down my apartment window.

BEC- PASS

[Just3Letters]

Spartans, that's my goal too! I REALLY hope I pass Reg so I can have 2 done before starting and then 2 more hopefully done before busy season. We'll see!

haha that's the corporate stuff right? Yeah the toughest part for me was transitioning to C corps, S corps, LLCs, general partnerships, limited Partners, etc. when I didn't even have all the inidividual stuff down. I promise once you get through all the lectures and start doing comprehensive MC with R1-R8 everything starts getting much clearer. Most of the different business entities have lots in common but you can't really figure that out until you've been introduced to it all

It's painful but keep going!

FAR- 81
REG- 81
BEC- Aug 22, 2016
AUD- TBD

[Spartans92]

I know right Just3letters. Luckily, I just took a tax course so the C-corp stuff isn't too foreign to me but still the material is so dry and boring. I agree they all some commonalities. Like Section 351 and section 721 for deferred recognition of gain.
Ill prob post more Q's on here as I progress. Thanks for all the help! Have a great night and enjoy the weekend. 🙂

BEC- PASS

[Anonymous]

@csvirk I think the explanation is saying Burns wasn't aware of any reasons the contract should not fulfilled – the car had already been delivered, so Nagel was good; and as far as he knew Ross should receive the $800 from the Nagel, so Ross was good. By assigning the contract to someone else, Burns is implying that he is not aware of any issues, the contract is in good standing, everyone will still receive/pay what they agreed to.

I can't remember the exact rules, but there's probably something about not be able to assign a contract if he knew Nagel was never going to pay for whatever reason. So if something happens after the assignment and they can prove that Burns was aware of the issue when he assigned the contract, then he's probably on the hook for something.

[Just3Letters]

Back to CSvirks question,

I'm still confused. Burns contracted to sell the car to Nagel. Nagel agreed. At that point (Mailbox rule or whatever else), a contract is formed because Nagel agreed to the contract. Burns was supposed to deliver on the 21, but I don't think he did. The questions states, “On February 21, Burns assigned the contract to Ross for $600. Nagel was not informed of the assignment”. Therefore, I think Nagel just thought Burns was late in delivering the car.

How could burns sell the car to Ross if he has already delivered it to Nagel on the 15?

I guess I don't even understand the context of the question :l

FAR- 81
REG- 81
BEC- Aug 22, 2016
AUD- TBD

[csvirk]

Just3 here is another one!

On September 10, Bell Corp. entered into a contract to purchase 50 lamps from Glow Manufacturing. Bell prepaid 40% of the purchase price. Glow became insolvent on September 19 before segregating, in its inventory, the lamps to be delivered to Bell. Bell will not be able to recover the lamps because:

Incorrect A.
Bell is regarded as a merchant.

B.
the lamps were not identified to the contract.

C.
Glow became insolvent fewer than 10 days after receipt of Bell’s prepayment.

D.
Bell did not pay the full price at the time of purchase.

Correct Answer is B BUT WHY!!

Explnation:

Bell never had title to the lamps. Title passes from the seller to the buyer only if the goods are identified in the sales contract.

FAR: 71, 77!
AUD: 69, 80
BEC: 72
REG: 84

[Just3Letters]

lol I have no idea Csvirk,

I know that one of the requirements for a contract for title is that the goods be identified, but clearly the contract was for the 50 lamps so they were obviously identified. Right?

This Blaw stuff absolutely kills me. According to my scores per category, I do pretty well in Blaw, mid 80s, but I feel that I know tax way better than this contract crap!

FAR- 81
REG- 81
BEC- Aug 22, 2016
AUD- TBD

[csvirk]

Just3

B-law remind of AUD!. One word can change whole question. UGHHH!

FAR: 71, 77!
AUD: 69, 80
BEC: 72
REG: 84

[Just3Letters]

LOL I am NOT looking forward to audit!

FAR- 81
REG- 81
BEC- Aug 22, 2016
AUD- TBD

[csvirk]

Here is the one to test your Blaw knowledge.

Cobb gave Garson a signed check with the amount payable left blank. Garson was to fill in, as the amount, the price of fuel oil Garson was to deliver to Cobb at a later date. Garson estimated the amount at $700, but told Cobb it would be no more than $900. Garson did not deliver the fuel oil, but filled in the amount of $1,000 on the check. Garson then negotiated the check to Josephs in satisfaction of a $500 debt with the $500 balance paid to Garson in cash. Cobb stopped payment and Josephs is seeking to collect $1,000 from Cobb. Cobb's maximum liability to Josephs will be:

A.
$0.

B.
$500.

C.
$900.

D.
$1,000.

FAR: 71, 77!
AUD: 69, 80
BEC: 72
REG: 84

[Just3Letters]

Anybody know why Elgar gets allocated $3,000 of Grant's $9,000 loss ($20,000 – his $11,000 capital account) rather than 30% which would be $2700? Correct answer is A.

Dowd, Elgar, Frost, and Grant formed a general partnership. Their written partnership agreement provided that the profits would be divided so that Dowd would receive 40%; Elgar, 30%; Frost, 20%; and Grant, 10%. There was no provision for allocating losses. At the end of its first year, the partnership had losses of $200,000. Before allocating losses, the partners' capital account balances were: Dowd, $120,000; Elgar, $100,000; Frost, $75,000; and Grant, $11,000. Grant refuses to make any further contributions to the partnership. Ignore the effects of federal partnership tax law.

After losses were allocated to the partners' capital accounts and all liabilities were paid, the partnership's sole asset was $106,000 in cash. How much would Elgar receive on dissolution of the partnership?

A.
$37,000

B.
$40,000

Incorrect C.
$47,500

D.
$50,000

FAR- 81
REG- 81
BEC- Aug 22, 2016
AUD- TBD

[Just3Letters]

CSvirk, I believe Jospeh is an HDC for the full $1,000 so Cobb is liable for $1,000 correct? Even though Garson breached the contract, I believe that makes the contract voidable but not void. And the check has already been given to Joseph making him HDC.

ugh, IDK.

FAR- 81
REG- 81
BEC- Aug 22, 2016
AUD- TBD

[csvirk]

yes, you are correct.

FAR: 71, 77!
AUD: 69, 80
BEC: 72
REG: 84

[Author]

Replies