cpahints

CPA Problems
Problem assignments and hints to problem solutions
Spring, 2012
(All dates and problem assignments are tentative and subject to change)

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Financial Accounting Topics (FAR)

Date

Problem

Check figures and notes

Week 1.--Assignment for Tuesday,January 24 and Thursday, January 26

F-30

increase in income: 1971 $72,252: 1972: decrease $(35,547).

total of accrual basis columns should be $259,225. (Does Mary Ward's accountant record every adjustment each year to reflect her statements on an accrual basis? Or are just some of the adjustments made? The answer to this question will explain the adjustment made on the worksheet for the accrued expenses for 1983.)

F-46

After you make all of the adjusting entries for the paragraphs in the problem, you will need to:
1. calculate the correct income before tax (after giving effect to the adjustments.)
2.Then compute the tax expense on that income number.
3. then make an adjusting entry to adjust the provision for income taxes (i.e, income tax expense) to the amount of tax you computed in (2). the entry will be to Provision for income taxes and income taxe payable.
4. calculate net income: make a final entry that will debit/credit the net income line on the worksheet for the amount to adjust the given net income ($336,000) to the corrected net income; the other part of that entry will be to the retained earnings line.

F-50

total of accrual basis columns should be $556,250.

F-51

total of accrual basis columns should be $938,850. (you should complete these columns, even though the worksheet indicated not.)

Homework problem to be turned in on Tuesday,January 31

F-49

Use the worksheet in the problem for part (a). Use columnar paper for part (b). Do NOT use notebook paper. Remember to fold your problem lengthwise and put your name and problem number on the outside of the assignment.

Week 2: Assignment for Tuesday, January 31 and Thursday, February 2:

F-83_R2 has been revised to reflect SFAS No. 154

F-65

Glenn Corporation eps for net income =$2.80

F-83_R2

Garr Corporation eps for net income = $7.52
net income = $1,731,000

F-85

Pitt Corporation eps for net income = $1.95

F-395
F-395_A

American Horse (Simulation Problem)
American Horse ( Task-Based Simulation: Post-2010)

F-97

OOF Problem (Other Objective Format (OOF))

Homework problem to be turned in on Tuesday, February 7:

F-90

Do not work ahead as the homework problems to be turned in may be changed.

Week 3. Assignment for Tuesday, February 7and Thursday, February 9:

With the exception of F-75 and F-100, these problems involve statements of cash flows. We'll utilize the "T" account method to analyze the cash flows

F-75

--preparation of classified balance sheet

F-100

--ratio analysis

.notes on cash flow statement

F-111

--total cash flows from operations = $420,000

F-128

-OOF problem on cash flows

F-132

--OOF problem on cash flows

F-136

-total cash flows from operations = $272,000

Homework problem to be turned in on Tuesday, February 14:

F-135

Week 4. Assignment for Tuesday, February 14 and Thursday, February 16:

The bulk of these problems deal with inventory matters.

Lox Company

--Classroom exercise illustrating dollar value lifo inventory

Zee Company

--Classroom exercise illustrating lifo retail inventory

F-141

(a)cost flow assumptions (b) retail inventory

Regarding problem F-142: Topanga Mfging Co.
The reason we use the 1977 November 8 and December 13 units/costs to start building our 12/31/1978 ending inventory is:
We had a beginning inventory of Mult of 15,000: where did it come from?
Remember we used FIFO back at the end of 1977:
Most recent purchases:
Beginning inventory: composed of
Dec. 13, 10,000 @ $6;
Nov. 8, 5,000 @ $5

The January 7 and April 16 layers from 1977 were assumed sold in 1977, so aren't available any longer.

So, in calculating ending inventory for Dec 31, 1978, our oldest layer has to go into the inventory first. Our oldest layer is the beginning inventory, composed of the 10,000 (Dec 13 1977 purchase) and the 5,000 (left from the November 8 purchase.)
So that is where we start building our LIFO inventory

F-142

effect of LIFO vs. FIFO inventory methods; dollar value lifo; lifo retail

How to treat employee discounts

F-143

(a) gross profit method (b) retail inventory (c) dollar value lifo

F-146-B

lower ofcost or market application

F-145

cut-offs and adjustments at year end exercise on contruction contracts

F-185

construction contracts

Homework problem to be turned in on Tuesday, February 21:

F-147

Use ID and Password provided in class. You need access to complete the Research Tab component of this problem.

Week 5.Assignment for Tuesday, February 21 and Thursday, February 23

Accounting for investments using the equity method have been modified by fas # 142. Basically, any goodwill present in the purchase price is no longer amortized; instead, goodwill is periodically reviewed for impairement.

F-148-R

modified to reflect FAS No. 115

F-151

-OOF problem, investments

F-156-B

Long term receivables and interest

F-159R

Investments--Revised to reflect Fas No. 115 and Fas No. 142
(notes on stock rights)

F-217

.Bond and stock investments

F-205

OOF problem, transaction identification