Do You Have a Strong Personal Goal?

Try us FIRST before you spend your hard-earned money.   CPA Review for FREE Over 2,400 FREE CPA Review Questions and Answers Available to YOU (for FREE)   October 11, 2013 Lesson 141   From:   Joe   Vote Every Day Until October 13, 2013   WE NEED YOUR HELP.    Over the years, I have received thousands of emails from candidates saying “thanks for providing so many free questions and answers so that I was able to pass the CPA Exam.   Please let me know if I can ever return the favor.”   Okay, here is how you (yes, YOU) can help.   It is easy and simple.   We are participating in a contest to get a free Super Bowl commercial (wow, that sounds really impressive).   We have made it down to the final 250 contestants.   They are going to trim down the number again soon.    We need for you to go to the following website and vote for US once a day untilOctober 20.   When you're on the website working questions, click on the orange VOTE button in the right side of the page.   Please do it.   Please.   We would love to win.   And, it takes so little of your time.   Just once a day for a few seconds.   You can help us keep this website free to all.   Tell your friends and neighbors and enemies and strangers to vote also.   Let’s show the world that a free CPA Exam review program can garner genuine love and affection from its “customers.”   We cannot do it but YOU can do it!!!!   We offer you 2,400 free questions and answers.   We have done that now for years.   Return the favor and vote once a day untilOctober 20.   THANKS!!   Strive for a Personal Strong Goal   I was recently on a 16-day tour of Portugal and Spain.   We traveled constantly and walked 1-2 miles every day.   On the trip was a 91 year old woman.   Much to my surprise, she matched our hikes step for step, day after day.  She was amazing.        One evening at dinner, I asked her where she had been in the world.   Here was our conversation.   She:   Oh, I have been pretty much everywhere in the world. Me:   Okay, have you been to Tanzania? She:   Sure, I was there in about 1987. Me:    Have you been to India? She:   I’ve been to both the north and the south of India. Me:   Have you been to Japan? She:   Lived there for a while. Me:   Have you ever been to Antarctica? She:   Actually, I have been there fairly recently on a tour.   I was stunned by her ability to see the world.   So, I asked her the question that I really wanted to know:   More...     Words, Actions or Both?    I am reading a book (published in 1997) titled A Regular Guy by Mona Simpson who is the half-sister of Steve Jobs.   The “hero” of the book is a creative and unique individual who starts an innovative company and gets very rich and appears (obviously) to be patterned after Mr. Jobs.   I am not at all certain what the relationship was between Simpson and Jobs but, in this book, the “hero” does a lot of interesting things – many of which seem just plain eccentric but some seem truly like a genius.     About halfway through the book, the daughter of the “hero” looks at him and makes a really tough assessment:   “but what he said was better than he was.”   I stopped and read that line several times and wondered how often it applied to me.   We all talk about what we are going to do, how much we are going to accomplish in life.   We tell people all about our hopes and aspirations.   But is that just talk or is it something that seriously guides our lives and pushes us forward?     Suppose someone went along behind us each day and wrote day everything we had to say.   Which would be better:   the words on that page or the actions we take?   We talk about accomplishments but are they just mere words or are we capable of matching our words by our works?  More useful actions...     Let’s add some points.   Let’s do some practice.    The answers are at the end of all quesitons.   FAR   Assets and liabilities occasionally have to be reported at fair value.   Fair values can be determined in many different ways.   To help accountants know which is the best method to use to determine fair value, FASB created a three-level fair value hierarchy.   Which of the following is not true about that hierarchy? a.   An investment in Ford Motor Co. shares is valued at its stock price which is a Level 1 valuation. b.   A potential asset retirement obligation is valued at the present value of the estimated future cash flows which is a Level 1 valuation. c.   A building acquired in trade is valued based on the recent sales price of a nearby building that was similar which is a Level 2 valuation. d.   A donut franchise is valued based on the sales price of a similar pastry franchise a few miles away which is a Level 2 valuation.     Regulation   The Gemini Corporation has a production machine with a tax basis of $80,000 and a fair value of $91,000.   It is traded for a newer model machine with a fair value of $100,000.   Gemini also pays cash of $8,000.   Which of the following is true? a.   No taxable gain and the tax basis of the new asset is $100,000 b.   No taxable gain and the tax basis of the new asset is $88,000 c.   $1,000 taxable gain and the tax basis of the new asset is $100,000 d.   $1,000 taxable gain and the tax basis of the new asset is $88,000     Auditing   The Aragon Company has two bank accounts.   A check for $20,000 is drawn on bank one late on December 31 and deposited into bank two on the same day.    In preparing a year-end bank reconciliation for bank two, the check is listed as a deposit in transit.   In preparing a year-end bank reconciliation for bank one, the check is not listed as outstanding.   What is the client most likely doing here? a.   A wash transfer b.   Kiting c.   A reciprocal transaction d.   Realignment posting     BEC   A company holds $300,000 in cash in a bank account.    The company views this balance as a speculative balance.   Which of the following is most likely to be true? a.   The money is being held in case a litigation claim is lost b.   The money is being held in case a weather emergency arises c.    The money is being held in case unexpected repairs are required in an electric generator d.    The money is being held in case inventory prices from suppliers suddenly drops.     Answers:   FAR Answer is B   According to FASB, Level 1 valuations are preferred because they are based on active market prices (such as the stock price for Ford shares).   Level 2 comes next which is based on observable inputs such as the sales price of a nearby building or franchise.   Those sales prices are real not assumptions.   Level 3 valuations are the least desirable because they are based on unobservable inputs that are based on assumptions.   Using the present value of future cash flows is only an estimate and cannot be observed until time passes.    The asset retirement obligation is a Level 3 valuation rather than Level 1.   REG Answer is B   This is a trade of like-kind property.   No gain is recognized in such trades unless boot (cash) is received.   Here, the cash is paid so the trade creates no taxable gain.   Thus, the new asset is recorded at the tax basis of the property surrendered:   previous machine with a tax basis of $80,000 and cash with a tax basis of $8,000.   New asset has a total tax basis of $88,000.   Auditing Answer is B   By adding the money as a deposit in transit while not recording the reduction as an outstanding check, the company appears to have more money than it actually does have.   This inflation is known as kiting and is used to either make the company look better than it actually is or cover up for money that has been stolen.   BEC Answer is D   Answers a, b, and c are viewed as precautionary balances.   The money is being held to take care of unexpected difficulties that might arise.    A speculative balance provides the flexibility to take advantage of unexpected income opportunities.   The drop in the price of inventory would be one such opportunity.   The available money would allow the company to buy inventory at especially low prices.     Have a great week and vote for CPAreviewforFREE Go Go Go!!!!     Joe Hoyle President CPA Review for FREE