[jeff]

Welcome to the Q4 2016 CPA Exam Study Group for REG.

If this is your first post in the study group – please post your target exam date (just the time frame to preserve your anonymity), and your past history with this exam (optional, of course).

[So FAR So Good]

Becker R-4 sims are the most awful thing I've run into in my time studying for the CPA. Holy cow… I've already spent 4 hours going through them and I'm still not done! So brutal…

F - 91 (6/5/2016)
A - 7/30/2016
R - 10/8/2016
B - 12/10/2016

[jonm857]

@So FAR So Good

They are terrible and it took me just as long to complete them, even without doing the research questions. Notice how Becker pumped the majority of their sims in Chs 1 through 4. Chs 5 through 8 Sims take about 20 minutes each.

B - 81
A - 87
R - 73
F - July 5th

[jonm857]

Do not understand the solution here. My understanding is that negligence consists of:
1) Seller owed a duty of care
2) Seller breached that duty of care
3) Plaintiff suffered damages
4) Plaintiff's damages were caused by the seller's negligence

Justifiable reliance is an element of fraud, so why is this the correct answer for negligent misrepresentation?

– – – – – – – – –

Which of the following facts must be proven for a plaintiff to prevail in a common law negligent misrepresentation action?
a. The misrepresentations were in writing.
b. The misrepresentations concerned opinion.
c. The defendant made the misrepresentations with a reckless disregard for the truth.
d. The plaintiff justifiably relied on the misrepresentations.

Choice “d” is correct. To make out an action for negligent misrepresentation, the plaintiff must show both actual and justifiable reliance on the misrepresentation.

B - 81
A - 87
R - 73
F - July 5th

[Reg_Slayer]

i found this https://www.another71.com/cpa-exam-forum/topic/reg-question-help/

I have not mastered the tax yet, so i am not yet going to do much b-law.

[jonm857]

@Reg_slayer

Thanks. I guess you have to separate the term “negligent misrepresentation” from the term “negligence” because both apparently mean different things. Becker really goofed this one up in my opinion. They don't even list “negligent misrepresentation” in the text. They do define “innocent misrepresentation”, but that looks separate.

B - 81
A - 87
R - 73
F - July 5th

[jpowell31]

yeah this is one of those situations where none of the other answers could be right so that's it.. common law = scienter so c) isn't right.

[jonm857]

This is one of my favorite sentences in ch. 6 MCQs.

“A sheep rancher agreed, in writing, to sell all the wool shorn during the shearing season to a weaver.”

B - 81
A - 87
R - 73
F - July 5th

[jpowell31]

haa I asked my boyfriend a couple weeks back if he knew that *insert farming reference here*… he responded as most normal people would….but seriously…what the F%*& is wrong with these examiners

[Reg_Slayer]

$50,000 revenue
(10,000) cogs
(1,000) office supplies
(2,000) 50% Meals
(2,600) FICA taxes
=$34,400 Net amount reported as a single line item for business income

Why take out the full 2.6 of fica/SE tax out of gross income? I thought it was only 50%?

[jonm857]

They are just a bunch of evil demons. They failed me by 2 lousy points last time for REG. That will not happen again.

B - 81
A - 87
R - 73
F - July 5th

[jonm857]

@Reg_slayer

You take 50% as an above the line deduction to arrive at AGI, but it looks like you take 100% on schedule C. Let me look that up again to be sure it’s always 100% on schedule C.

B - 81
A - 87
R - 73
F - July 5th

[jonm857]

@Reg_slayer

You take 50% as an above the line deduction to arrive at AGI, but it looks like you take 100% on schedule C. Let me look that up again to be sure it's always 100% on schedule C.

B - 81
A - 87
R - 73
F - July 5th

[Reg_Slayer]

thanks mr farley.

[jonm857]

@Reg_Slayer

My understanding is that payroll taxes (FICA & Medicare) are 100% deductible on Schedule C. Once you determine your net profit or loss from Schedule C, you enter the profit or loss on Schedule SE to determine your SE tax, which you'll then add to your 1040 on line 57. However, you deduct half of that SE tax as a deduction to arrive at AGI on line 27.

B - 81
A - 87
R - 73
F - July 5th

[jonm857]

Would really like somebody to confirm that because something tells me its only the employee portion of FICA that is deductible on schedule C.

B - 81
A - 87
R - 73
F - July 5th

[Author]

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