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Question of the Day

[headline style="1" font_size="40" font_font="Lato" font_color="%23336699" align="left"]Question of the Day[/headline]

Edit Element Clone Element Advanced Element Options Move Remove Element

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Edit Element Clone Element Advanced Element Options Move Remove Element

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				Question <span>1</span> of <span>7</span>				</div>
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						<p>Indicate the proper accounting treatment for the contingent liabilities of the JIS Machinery Co. Assume all amounts are material and the situation occurred in year 1. Indicate whether an accrual is required and the accrual amount if any required for the situation.</p>
<p><img fetchpriority="high" fetchpriority="high" decoding="async" class="alignnone size-full wp-image-2240" src="http://www.superfastcpa.com/wp-content/uploads/2017/09/far-sim-38-Contingent-liabilities-05-matrix.png" alt="" width="467" height="145" srcset="https://www.superfastcpa.com/wp-content/uploads/2017/09/far-sim-38-Contingent-liabilities-05-matrix.png 467w, https://www.superfastcpa.com/wp-content/uploads/2017/09/far-sim-38-Contingent-liabilities-05-matrix-300x93.png 300w" sizes="(max-width: 467px) 100vw, 467px" /></p>
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				Question <span>2</span> of <span>7</span>				</div>
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					<span>2</span>. Question
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						<p>JRM co. is in the process of closing its books for the year ended December 31, year 2.</p>
<p>The following business events are not properly reflected in JRM's December 31, year 2, unadjusted trial balance:</p>
<p><img decoding="async" class="alignnone size-full wp-image-2244" src="http://www.superfastcpa.com/wp-content/uploads/2017/09/far-sim-50-Adjusted-trial-balance-02.png" alt="" width="617" height="437" srcset="https://www.superfastcpa.com/wp-content/uploads/2017/09/far-sim-50-Adjusted-trial-balance-02.png 617w, https://www.superfastcpa.com/wp-content/uploads/2017/09/far-sim-50-Adjusted-trial-balance-02-300x212.png 300w" sizes="(max-width: 617px) 100vw, 617px" /></p>
<p>Based on the business events above, calculate the adjustments necessary to JRM's unadjusted trial balance for the allowance for doubtful debt account. The trial balance shows a credit balance of $2,500 for the allowance for doubtful debt account.</p>
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								$855								</li>
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								$750								</li>
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								$62.50								</li>
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					<span>3</span>. Question
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						<p>Richter Corp uses the straight-line method for amortization and depreciation and that all amortization and depreciation is recorded on December 31 of each year. Richter uses separate general ledger accounts to record accumulated amortization for each intangible asset.</p>
<p>On April 1, year 1 Richter purchased a patent with a 10-year life for $50,000 from DD co. DD incurred costs of $35,000 developing the patent. Prepare the journal entry, if any, to record the patent. </p>
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								Patents account $50,000								</li>
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								Cash account $50,000								</li>
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								Patents account $35,000								</li>
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								Cash account $35,000								</li>
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								Cash account $0								</li>
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								Patents account $0								</li>
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				Question <span>4</span> of <span>7</span>				</div>
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					<span>4</span>. Question
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						<p>Peterson Co. owns 100% of the outstanding common stock of Silver Corp. On January 1, year 3, Peterson sold equipment to Silver for $120,000, which was originally purchased on January 1, year 1 for $100,000. Peterson was depreciating the equipment over 10 years using straight-line depreciation. There was no salvage value. Silver decides to depreciate the equipment over eight years, also using straight-line depreciation with no salvage value. Assume all other appropriate year-end and income tax journal entries have been made. </p>
<p>Prepare Peterson's eliminating journal entry required for consolidation purposes for the year ended December 31, year 3.</p>
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								Debit $40,000								</li>
																<li class="wpProQuiz_sortStringItem" data-pos="1">
								Credit $15,000								</li>
																<li class="wpProQuiz_sortStringItem" data-pos="2">
								Credit $5,000								</li>
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								Credit $20,000								</li>
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								Debit $20,000								</li>
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								Debit $5,000								</li>
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								Debit $15,000								</li>
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								Credit $40,000								</li>
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													<div
														class="wpProQuiz_maxtrixSortText">Gain on Sale</div>
												</td>
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											</tr>
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											<tbody>
											<tr class="wpProQuiz_mextrixTr">
												<td width="20%">
													<div
														class="wpProQuiz_maxtrixSortText">Accumulated depreciation </div>
												</td>
												<td width="80%">
													<ul class="wpProQuiz_maxtrixSortCriterion"></ul>
												</td>
											</tr>
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																			<table>
											<tbody>
											<tr class="wpProQuiz_mextrixTr">
												<td width="20%">
													<div
														class="wpProQuiz_maxtrixSortText">Depreciation expense</div>
												</td>
												<td width="80%">
													<ul class="wpProQuiz_maxtrixSortCriterion"></ul>
												</td>
											</tr>
											</tbody>
										</table>

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																			<table>
											<tbody>
											<tr class="wpProQuiz_mextrixTr">
												<td width="20%">
													<div
														class="wpProQuiz_maxtrixSortText">Equipment</div>
												</td>
												<td width="80%">
													<ul class="wpProQuiz_maxtrixSortCriterion"></ul>
												</td>
											</tr>
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															<span>
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				<div
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				>
				Question <span>5</span> of <span>7</span>				</div>
				<h5 style="display: inline-block;" class="wpProQuiz_header">
					<span>5</span>. Question
				</h5>

				
								<fieldset class="wpProQuiz_question" style="margin: 10px 0px 0px 0px;" tabindex="0">
					<legend class="wpProQuiz_question_text">
						<p>Adell Corp. is a manufacturer of paper products with a December 31 year end. Adell has not elected the fair value option. </p>
<p>For the transaction below, provide the correct classification and how should it be reported in the company's balance sheet. </p>
<p>100 shares of ABC Co. were purchased as an investment on June 1, year 1, for $20 per share. The company intends to sell all of the shares within 30 days of the year end. The market value per share at December 31, year 1, is $22 per share.</p>
					</legend>

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																<div class="wpProQuiz_matrixSortString">
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							Sort elements							</h5>
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								Trading security								</li>
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								Current asset								</li>
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								Noncurrent asset								</li>
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								Available-for-sale security								</li>
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								Treasury stock								</li>
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								Common stock warrants								</li>
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								Not applicable								</li>
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										<div class="wpProQuiz_questionList" data-question_id="1951"
						data-type="matrix_sort_answer">
						
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														class="wpProQuiz_maxtrixSortText">Classification</div>
												</td>
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													<ul class="wpProQuiz_maxtrixSortCriterion"></ul>
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													<div
														class="wpProQuiz_maxtrixSortText">Current or noncurrent asset</div>
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												</td>
											</tr>
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									<div class="wpProQuiz_response" style="display: none;">
						<div style="display: none;" class="wpProQuiz_correct">
															<span>
								Correct								</span>
														<div class="wpProQuiz_AnswerMessage"></div>
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						<div style="display: none;" class="wpProQuiz_incorrect">
															<span>
								Incorrect							</span>
														<div class="wpProQuiz_AnswerMessage"></div>
						</div>
					</div>
				
				
												<input type="button" name="back" value="Back" class="wpProQuiz_button wpProQuiz_QuestionButton" style="float: left ; margin-right: 10px ; display: none;"> 												<input type="button" name="check" value="Check" class="wpProQuiz_button wpProQuiz_QuestionButton" style="float: right ; margin-right: 10px ; display: none;"> 								<input type="button" name="next" value="Next" class="wpProQuiz_button wpProQuiz_QuestionButton" style="float: right; display: none;"> 								<div style="clear: both;"></div>

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				>
				Question <span>6</span> of <span>7</span>				</div>
				<h5 style="display: inline-block;" class="wpProQuiz_header">
					<span>6</span>. Question
				</h5>

				
								<fieldset class="wpProQuiz_question" style="margin: 10px 0px 0px 0px;" tabindex="0">
					<legend class="wpProQuiz_question_text">
						<p>On January 1, year 1, Stopaz Co. Issued 8% fiver-year bonds with a face value of $200,000. The bonds pay interest semiannually on June 30 and December 31 of each year. The bonds were issued when the market interest rate was 4% and the bond proceeds were $235,931.</p>
<p>Stopaz uses the effective interest method for amortizing bond premiums/discounts and maintains separate general ledger accounts for each.</p>
<p>Calculate the actual cash expense in relation to the payment of interest on June 30, year 1.</p>
					</legend>

					<div class="wpProQuiz_clear" style="clear:both;"></div>

										
										<div class="wpProQuiz_questionList" data-question_id="2114"
						data-type="single">
						
								<div class="wpProQuiz_questionListItem" data-pos="0">
																			<span style="display:none;"></span>
										<label>
											<input class="wpProQuiz_questionInput" autocomplete="off"
													type="radio"
													name="question_24_2114"
													value="1"> $4,719										</label>

																		</div>
								
								<div class="wpProQuiz_questionListItem" data-pos="1">
																			<span style="display:none;"></span>
										<label>
											<input class="wpProQuiz_questionInput" autocomplete="off"
													type="radio"
													name="question_24_2114"
													value="2"> $8,000										</label>

																		</div>
								
								<div class="wpProQuiz_questionListItem" data-pos="2">
																			<span style="display:none;"></span>
										<label>
											<input class="wpProQuiz_questionInput" autocomplete="off"
													type="radio"
													name="question_24_2114"
													value="3"> $16,000										</label>

																		</div>
								
								<div class="wpProQuiz_questionListItem" data-pos="3">
																			<span style="display:none;"></span>
										<label>
											<input class="wpProQuiz_questionInput" autocomplete="off"
													type="radio"
													name="question_24_2114"
													value="4"> $3,281										</label>

																		</div>
													</div>
									</fieldset>
									<div class="wpProQuiz_response" style="display: none;">
						<div style="display: none;" class="wpProQuiz_correct">
															<span>
								Correct								</span>
														<div class="wpProQuiz_AnswerMessage"></div>
						</div>
						<div style="display: none;" class="wpProQuiz_incorrect">
															<span>
								Incorrect							</span>
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						</div>
					</div>
				
				
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				>
				Question <span>7</span> of <span>7</span>				</div>
				<h5 style="display: inline-block;" class="wpProQuiz_header">
					<span>7</span>. Question
				</h5>

				
								<fieldset class="wpProQuiz_question" style="margin: 10px 0px 0px 0px;" tabindex="0">
					<legend class="wpProQuiz_question_text">
						<p>Larkin Co. has owned 25% of the common stock of Devon Co. for a number of years, and has the ability to exercise significant influence over Devon. The following information relates to Larkin's investment in Devon during the most recent year:</p>
<p><img decoding="async" class="alignnone size-full wp-image-1637" src="http://www.superfastcpa.com/wp-content/uploads/2017/04/Screen-Shot-2017-04-24-at-3.53.47-PM.png" alt="" width="666" height="79" /></p>
<p>What is the carrying amount of Larkin's investment in Devon at year end?</p>
					</legend>

					<div class="wpProQuiz_clear" style="clear:both;"></div>

										
										<div class="wpProQuiz_questionList" data-question_id="2115"
						data-type="single">
						
								<div class="wpProQuiz_questionListItem" data-pos="0">
																			<span style="display:none;"></span>
										<label>
											<input class="wpProQuiz_questionInput" autocomplete="off"
													type="radio"
													name="question_24_2115"
													value="1"> $100,000										</label>

																		</div>
								
								<div class="wpProQuiz_questionListItem" data-pos="1">
																			<span style="display:none;"></span>
										<label>
											<input class="wpProQuiz_questionInput" autocomplete="off"
													type="radio"
													name="question_24_2115"
													value="2"> $200,000										</label>

																		</div>
								
								<div class="wpProQuiz_questionListItem" data-pos="2">
																			<span style="display:none;"></span>
										<label>
											<input class="wpProQuiz_questionInput" autocomplete="off"
													type="radio"
													name="question_24_2115"
													value="3"> $250,000										</label>

																		</div>
								
								<div class="wpProQuiz_questionListItem" data-pos="3">
																			<span style="display:none;"></span>
										<label>
											<input class="wpProQuiz_questionInput" autocomplete="off"
													type="radio"
													name="question_24_2115"
													value="4"> $350,000										</label>

																		</div>
													</div>
									</fieldset>
									<div class="wpProQuiz_response" style="display: none;">
						<div style="display: none;" class="wpProQuiz_correct">
															<span>
								Correct								</span>
														<div class="wpProQuiz_AnswerMessage"></div>
						</div>
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															<span>
								Incorrect							</span>
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						</div>
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[text_block style=”style_1.png” align=”left” font_color=”%23000000″]This is a “mini sim” from our new FAR mini-simulations. These work on mobile and desktop, so you can now practice SIMs as well, no matter where you are.

These are included with any of our MCQ products, and there are mini-sims for each section.[/text_block]

[text_block style="style_1.png" align="left" font_color="%23000000"]This is a "mini sim" from our new FAR mini-simulations. These work on mobile and desktop, so you can now practice SIMs as well, no matter where you are.</p>
<p>These are included with any of our MCQ products, and there are mini-sims for each section.[/text_block]

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How I Passed the Exams In 3 Months, While Working Full-Time

[headline style="1" font_size="32" font_font="Lato" font_color="%23336699" align="left"]How I Passed the Exams In 3 Months, While Working Full-Time[/headline]

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[text_block style=”style_1.png” align=”left” font_color=”%23000000″]I know that sounds too good to be true, and I’ll be the first one to admit… there’s no magic involved. However, it will make sense when you see the walkthrough.

Basically, once I started working full-time, I didn’t have 5-6 hours a day to leisurely sit and study anymore.

So, I did what I thought was the “80/20” of studying to get the best results in the shortest amount of time, and it ended up paying off.

I’ll walk you through what I did for free, in this training.

Make sure to attend a session if you haven’t yet, so you can save months of time from trying to figure this stuff out on your own.

It doesn’t matter what review course you’re using, these strategies can be applied and will make your life easier.

Choose a time and register here…

(Sidenote: This is very strategy-based. It’s something that review courses don’t teach you, but your strategy… such as how you approach the whole process is just as crucial as learning the material itself. So much so that the AICPA has started doing webinars on the “importance of having a strategy” when it comes to studying for and passing the CPA exams.)[/text_block]

[text_block style="style_1.png" align="left" font_color="%23000000"]I know that sounds too good to be true, and I'll be the first one to admit… there's no magic involved. However, it will make sense when you see the walkthrough.</p>
<p>Basically, once I started working full-time, I didn't have 5-6 hours a day to leisurely sit and study anymore.</p>
<p>So, I did what I thought was the "80/20" of studying to get the best results in the shortest amount of time, and it ended up paying off.</p>
<p>I'll walk you through what I did for free, <a href="http://www.superfastcpa.com/training" target="_blank" rel="noopener">in this training</a>.</p>
<p>Make sure to attend a session if you haven't yet, so you can save months of time from trying to figure this stuff out on your own.</p>
<p>It doesn't matter what review course you're using, these strategies can be applied and will make your life easier.</p>
<p><a href="http://www.superfastcpa.com/training" target="_blank" rel="noopener">Choose a time and register here…</a></p>
<p>(Sidenote: This is very strategy-based. It's something that review courses don't teach you, but your strategy… such as how you approach the whole process is just as crucial as learning the material itself. So much so that the AICPA has started doing webinars on the "importance of having a strategy" when it comes to studying for and passing the CPA exams.)[/text_block]

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