Active TopicsActive Topics  Display List of Forum MembersMemberlist  Search The ForumSearch  HelpHelp
  RegisterRegister  LoginLogin
FAR STUDY GROUP
 CPAnet Forum : FAR STUDY GROUP
Subject Topic: Becker chapter 2 (Topic Closed Topic Closed) Post ReplyPost New Topic
  
Author
Message << Prev Topic | Next Topic >>
berry0331
Newbie
Newbie


Joined: 04 Sep 2011
Online Status: Offline
Posts: 49
Posted: 29 Apr 2012 at 20:46 | IP Logged  

Am I the only one who thinks these problems are hard? Any explanation
would be great. Thanks in advance!

Question CPA-00790

On May 1, Year 1, Marno County issued property tax assessments for the
fiscal year ended June 30, Year 2. The first of two equal installments was
due on November 1, Year 1. On September 1, Year 1, Dyur Co. purchased
a 4-year old factory in Marno subject to an allowance for accrued taxes.
Dyur did not record the entire year's property tax obligation, but instead
records tax expenses at the end of each month by adjusting prepaid
property taxes or property taxes payable, as appropriate. The recording of
the November 1, Year 1, payment by Dyur should have been allocated
between an increase in prepaid property taxes and a decrease in property
taxes payable in which of the following percentages?

a. Increase in prepaid property taxes 66 2/3%, Decrease in property taxes
payable 33 1/3%
b. Increase in prepaid property taxes 0%, Decrease in property taxes
payable 100%
c. Increase in prepaid property taxes 50%, Decrease in property taxes
payable 50%
d. Increase in prepaid property taxes 33 1/3%, Decrease in property taxes
payable 66 2/3%

Choice "d" is correct. 33 1/3% increase in prepaid.



Question CPA-00794

Winn Co. sells subscriptions to a specialized directory that is published
semiannually and shipped to subscribers on April 15 and October 15.
Subscriptions received after the March 31 and September 30 cutoff dates
are held for the next publication. Cash from subscribers is received evenly
during the year and is credited to deferred subscription revenue. Data
relating to Year 2 are as follows:
Deferred subscription revenue, 1/1/Year 2     $ 750,000 Cash receipts
from subscribers     3,600,000
In its December 31, Year 2, balance sheet, Winn should report deferred
subscription revenue of:

a. $2,700,000
b. $1,800,000
c. $1,650,000
d. $900,000

Choice "d" is correct. $900,000.
Back to Top View berry0331's Profile Search for other posts by berry0331
 
astone
Contributor
Contributor
Avatar

Joined: 23 Mar 2011
Location: United States
Online Status: Offline
Posts: 91
Posted: 30 Apr 2012 at 11:47 | IP Logged  

Question CPA-00790
Tax Period = 07.01.01 - 06.30.02 = 12 Months
Payment on 11.01.01 = 6 month period
Months prepaid = 2 months
Prepaid % = 2 mos./6 mos. = .33
Payable on 11.01.01 = 12 months
Months remain payable = 8 months
Payable  % = 8 mos./12 mos. = .67
Question CPA-00794
Deferred Subscription Revenue = Cash received 10.01-12.31 3 months
Total cash receipts = 3,600,000 / 12 = 300,000 per month
Month Deferred * Monthly Receipts = 900,000

Back to Top View astone's Profile Search for other posts by astone
 
wool1
Newbie
Newbie


Joined: 26 May 2011
Online Status: Offline
Posts: 44
Posted: 22 Jun 2012 at 11:29 | IP Logged  

 you have to pay the full year's (7/1/01-6/30/02) worth of assessments even though you bought the building mid-year (9/1/01)? 

also , I dont think Months prepaid = 2 months.

Hereare their entries
9/30/01
tax expense 1 months' worth
....................tax payable 1 month's worth
10/30/01
tax expense 1 months' worth
....................tax payable 1 month's worth
11/1/01
Tax payable 2 months' worth
Prepaid tax  4 months' worth
....................cash 6 months' worth

my answer is a.
Back to Top View wool1's Profile Search for other posts by wool1
 
wool1
Newbie
Newbie


Joined: 26 May 2011
Online Status: Offline
Posts: 44
Posted: 22 Jun 2012 at 11:30 | IP Logged  

What in the world does this mean?
"subject to an allowance for accrued taxes."
Back to Top View wool1's Profile Search for other posts by wool1
 
musiclover2
Newbie
Newbie
Avatar

Joined: 19 Aug 2016
Online Status: Offline
Posts: 1
Posted: 19 Aug 2016 at 14:29 | IP Logged  

So the tax assessment period is for fiscal year ended
June 30, yr 2, then the period covered is:

July August September October November December
                                      *

Payment is made on November 1st, so the prepaid
remaining is only for November and December (2/6= 33
1/3%). July, August, September, and October (4/6= 66
2/3%) would have been expensed and property taxes
payable had been decreased.

Back to Top View musiclover2's Profile Search for other posts by musiclover2
 




Page of 2 Next >>
  Post ReplyPost New Topic
Printable version Printable version

Forum Jump
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot delete your posts in this forum
You cannot edit your posts in this forum
You cannot create polls in this forum
You cannot vote in polls in this forum

Powered by Web Wiz Forums version 7.9
Copyright ©2001-2010 Web Wiz Guide

This page was generated in 0.1094 seconds.

Copyright 1996-2016 CPAnet/MizWeb Communities All Rights Reserved
Twitter
|Facebook |CPA Exam Club | About | Contact | Newsletter | Advertise & Promote