[jeff]

SO I know every test is different but does anyone have any insight on what has been heavily tested recently? I take the exam Monday and I need to narrow my focus….Thanks!

AUD - 79
BEC - 80
FAR - 76
REG - 92

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

[Anonymous]

@CPA, I'm assuming you finished the material? I'm finishing with F9 today, and I actually pushed my test date back to the 31st from the 1st.

[Anonymous]

When a fund is underfunded the entry is going to be DR OCI and CR LIAB assuming there is no tax affect. What noncurrent asset account do we debit with OCI being credited?

[Anonymous]

Yeah, I've finished the material and now on to reviewing. Even when you have 13 days to review, it doesn't seem long enough LOL.

[Anonymous]

OK I need help understanding this answer:

For the year ended December 31, 20X1, Tyre Co. reported pretax financial statement income of $750,000. Its taxable income was $650,000. The difference is due to accelerated depreciation for income tax purposes. Tyre's effective income tax rate is 30%, and Tyre made estimated tax payments during 20X1 of $90,000. What amount should Tyre report as current income tax expense for 20X1?

A. $105,000

B. $135,000

C. $195,000

D. $225,000

When I think of the journal entry for this… it would be

Income tax expense $225,000

Deferred Income tax liability $30,000

Income tax payable $195,000

So I think the answer is D $225,000 as it is asking expense total… but it says it is C $195,000 Can someone explain why?

Thank you!

[stoleway]

@dbauer71

Current Taxes are assessed on taxable income

Therefore 650,000 x .3 = 195,000…..This is your current tax expense for the year.

Total Tax Expense……………..225,000

Current/ Tax Payable………………………………..195,000

DTL………………………………………………………30,000

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[Anonymous]

@stoleway Thank you for responding… but that is what I posted…

The MCQs are saying the answer for total current tax expense is $195,000…. it didn't say tax payable so I am confused on why it isn't $225,000 as you posted as well. We have the same journal entry.

[stoleway]

It is basically asking you how much will be expensed in the current year. Note that the 225,000 includes both the current expense and a long term liability. It will help you if you break it down like this

Tax Expense(LT)……………30,000

Tax Expense (Current)………195,000

DTL……………………………………………………….30,000

Tax Payable…………………………………………….195,000

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[Anonymous]

I'm going over the tax section and I'm with you dbauer, the wording makes some questions very difficult to answer. I had similar issues on a NOL problem.

[Anonymous]

Tyre's current income tax expense is simply TAXABLE income multiplied by the effective income tax rate.

Current income tax expense = Taxable income x Tax rate

= $650,000 x 0.30

= $195,000

[Anonymous]

During 20X1, Beck Co. purchased equipment for cash of $47,000, and sold equipment with a $10,000 carrying value for a gain of $5,000. How should these transactions be reported in Beck's 20X1 statement of cash flows?

A.

Cash outflow of $32,000

B.

Cash outflow of $42,000

Incorrect C.

Cash inflow of $5,000 and cash outflow of $47,000

D.

Cash inflow of $15,000 and cash outflow of $47,000

[Anonymous]

The following information pertains to Eagle Co.'s 20X1 sales:

Cash Sales

Gross $ 80,000

Returns and allowances 4,000

Credit Sales

Gross 120,000

Discounts 6,000

On January 1, 20X1, customers owed Eagle $40,000. On December 31, 20X1, customers owed Eagle $30,000. Eagle uses the direct write-off method for bad debts. No bad debts were recorded in 20X1. Under the cash basis of accounting, what amount of net revenue should Eagle report for 20X1?

Incorrect A.

$76,000

B.

$170,000

C.

$190,000

D.

$200,000

---

Maybe it's because it late at night and I'm doing mcqs, but this doesn't quite make sense to me. Answer is D. and in the equation Credit sales – discounts ($114k) is added to revenue under the cash basis. Since, it's credit sales (i.e., cash not yet collected) shouldn't it not be added to net revenue?

[rzrbkfaith]

It would be cash sales less return and allowances PLUS credit sales collected less discounts. Credit sales collected would be sales plus beginning AR less ending AR. Credit sale discounts would be included because they are given only upon payment.

80,000-4,000+120,000+40,000-30,000-6,000=200,000

AUD - 99
BEC - 97
REG - 91
FAR - 1/8/16

[NYCaccountant]

You started the year with 40,000 in receivables and ended the year with 30,000, which means you must have gotten paid for 10,000, so lets add that. You have 80,000 worth of cash sales, but gave back 4,000 for returns, so you collected 76,000 from cash sales, lets add that. Now it states you sold 120,000 worth of merchandise for credit sales, gave discounts of 6,000, so this means you had 114,000 worth of credit sales, and because the AR went down from 40,000 to 30,000, you must have collected all of 114,000, so lets add that. If AR went up 114,000, we would not include this number in our cash count because it would not have been collected, but because AR actually went down, this means all of the 114,000 was collected.

10,000+76,000+114,000=200,000.

AUD - 99
BEC - 84
FAR - 93
REG - 87

NYC born and raised.

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[Peterman25]

CPAHOPEFUL – what is the correct answer to the Beck Co. question?

I see it as $47k out for the purchase and $15k in for the sale. You will need at least $15k in for a $5k gain. Are they netted together for answer A or answer D because the transactions belong in 2 different sections of the cash flow statement or inflows and outflows in a similar section are presented separately? I'll admit that my cash flow knowledge is currently weak.

BEC 7/14 - PASS
FAR 10/14 - PASS
AUD 1/15 - PASS
REG 4/15 - PASS

AZ license - Official 8/20/2015

[Anonymous]

Answer is D, good stuff.

So for the acquisition of land, purchase price is 300,000, cost of razing old building 50,000, legal fees 10,000, delinquent taxes 20,000 and proceeds from sale of old building 13,000, what would the JE be?

DR Asset 367000

CR Cash 367000

?

[Author]

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