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Are You Ready to Pass the CPA Exam?! “To earn more, you must learn more.” – Bryan Tracy “Don’t study until you get it right, study until you can’t get it wrong.”$9.99
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Are You Ready to Pass the CPA Exam?! “To earn more, you must learn more.” – Bryan Tracy “Don’t study until you get it right, study until you can’t get it wrong.”
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Course
CPA
Institution
CPA
The test’s actual title is the Uniform Certified Public Accountant Examination, and it’s developed and scored by the American Institute of Certified Public Accountants (AICPA). But more importantly: the CPA test is necessary to achieve licensure in all 50 states and other U.S. jurisdictions.
1. Drillfast is a drilling corporation with operations at oil rigs around the world. For
the 2014 annual report, which business segment should be reported as an
operating segment?
A. South American segment, which contributes 8% of total revenues, 5% of
profits and accounts for 9% of assets. South American operating manager
reports to the chief operating officer.
B. African segment, which contributes 9% of the company’s assets, 16% of total
revenues, and 18% of profits. The African operating manager reports to the
British operating manager.
C. Australian segment, which contributes 10% of total revenues, 2% of assets,
and 4% of profits. The Australian manager reports to the chief operating officer.
D. Texas based corporate headquarters
ANSWER: C
The Australian segment has revenue that is greater than 10% of total revenue
and local management reports to the chief operating officer. A segment is
classified as an operating segment if either revenues, assets or profits are greater
than 10% of the company totals and the segment reports to the chief operating
decision maker.
2. Brayden Corporation issues bonds On May 1, year 1. The bonds are issued at 102
plus accrued interest, 100 of its 6%, $1,000 bonds. The bonds are dated January 1,
year 1. The bonds mature on January 1, year 5. Interest is payable semiannually on
January 1 and July 1. Brayden paid the investment bank $7,000 for the bond issue
costs. Based on the information above, Brayden would realize net cash receipts
from the bond issuance of
A. $ 97,000
B. $102,000
, C. $99,000
D. $ 95,000
ANSWER: A
$100,000 of bonds are issued at 102 plus accrued interest (4 months, from
January 1 to May 1) less bond issue costs of $7,000. The cash received for the
bonds is 102% of $100,000, or $102,000. The cash received for the accrued
interest is $2,000 ($100,000 x 6% x 4/12). Therefore, cash receipts total $97,000
($102,000 + $2,000 – $7,000).
3. Tristan, Inc. operates a business manufacturing bamboo cell phone cases. He
purchased a wood engraving machine in January year 1 for $30,000 and the
estimated useful life was 10 years. The engraving machine was being depreciated
using the straight-line method and has no salvage value. In year 5, Tristan,
impressed with the machine, decides to extend the useful life to 12 years. What
amount of depreciation expense should Tristan report in its financial statements
for the year ending December 31, year 5?
A. $4,500
B. $2,250
C. $1,800
D. $3,000
ANSWER: B
In previous years, Tristan reported a depreciation expense using the straight-line
method and no salvage value. This depreciation expense was $3,000 ($30,000 ÷
10 years) per year. Therefore, accumulated depreciation at January 1, year 5, was
$12,000 ($3,000 × 4 years). The book value at January 1, year 5, is equal to $18,000
($30,000 cost – $12,000 accumulated depreciation), and the remaining life is 8
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