Deal of The Day! Hurry Up, Grab the Special Discount - Save 25% - Ends In 00:00:00 Coupon code: SAVE25
Welcome to Pass4Success

- Free Preparation Discussions
Mail Us support@pass4success.com
Location US
Mob_nav_barsMENU

AICPA CPA-Financial Exam - Topic 3 Question 71 Discussion

Adam Corp. had the following infrequent transactions during 1989:* A $190,000 gain on reacquisition and retirement of bonds. This material event is also considered unusual for Adam Corp.* A $260,000 gain on the disposal of a component of a business. Adam continues similar operations at another location.* A $90,000 loss on the abandonment of equipment.In its 1989 income statement, what amount should Adam report as total infrequent net gains that are not considered extraordinary?
D) $450,000
A) $100,000
B) $170,000
C) $360,000

AICPA CPA-Financial Exam - Topic 3 Question 71 Discussion

Actual exam question for AICPA's CPA-Financial exam
Question #: 71
Topic #: 3
[All CPA-Financial Questions]

Adam Corp. had the following infrequent transactions during 1989:

* A $190,000 gain on reacquisition and retirement of bonds. This material event is also considered unusual for Adam Corp.

* A $260,000 gain on the disposal of a component of a business. Adam continues similar operations at another location.

* A $90,000 loss on the abandonment of equipment.

In its 1989 income statement, what amount should Adam report as total infrequent net gains that are not considered extraordinary?

Show Suggested Answer Hide Answer
Suggested Answer: D

Choice 'd' is correct. The concept of reliability in financial reporting includes; neutrality, representational faithfulness and verifiability.

Choices 'a', 'b', and 'c' are incorrect, per the above.


by Audra at Jul 09, 2023, 06:09 AM

Limited Time Offer

25%

Off

Get Premium CPA-Financial Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

0/2000 characters
Submit Cancel
Velda
8 months ago
Definitely $100,000 after all the adjustments!
upvoted 0 times
...
Roslyn
8 months ago
Really? I’m not sure about that calculation.
upvoted 0 times
...
Chauncey
8 months ago
I think it should be $170,000 after the loss.
upvoted 0 times
...
Deane
8 months ago
Wait, isn’t the loss on equipment supposed to be factored in?
upvoted 0 times
...
Loren
9 months ago
Total gains are $360,000 before the loss.
upvoted 0 times
...
Ona
9 months ago
I feel like the total should be the bond gain plus the disposal gain, but I’m not confident about how to handle the loss from the equipment.
upvoted 0 times
...
Jamal
9 months ago
The disposal gain seems straightforward, but I’m confused about how the abandonment loss affects the total. Should we subtract it from the gains?
upvoted 0 times
...
Thurman
9 months ago
I think we had a practice question similar to this one, and I remember that we only include gains that are not offset by losses.
upvoted 0 times
...
Mignon
9 months ago
I remember we discussed how to classify gains and losses, but I'm not sure if the bond gain counts as extraordinary since it's unusual.
upvoted 0 times
...
Merilyn
9 months ago
Ah, this is a good one. I remember learning about the different CloudGuard deployment methods in class. I'm pretty sure Terraform is one of the supported options, so I'll eliminate that. Now to figure out which of the remaining choices is not a valid method.
upvoted 0 times
...
Elouise
9 months ago
This is a great question! I'm pretty confident that the answer is Python, since it's a popular language for automation and scripting, and it integrates well with Docker.
upvoted 0 times
...
James
10 months ago
Okay, I think I've got this. Based on the information given, the Customer Success Manager seems like the most likely role to be accountable for developing and validating the Success Plan update. I'll go with that as my final answer.
upvoted 0 times
...
Jacob
1 year ago
Alright, time to put on my accountant hat. The question is pretty straightforward, but I can't help but feel like the answer is staring me in the face. Like, how could anyone get this wrong? Oh, wait, did I just say that out loud? Oops, my bad. Anyway, the answer is B) $170,000, and if you can't figure that out, you might want to consider a career change.
upvoted 0 times
Ernestine
1 year ago
I'm not sure about this one, but I'll go with D) $450,000. It seems like the total infrequent net gains should be higher based on the transactions mentioned.
upvoted 0 times
...
Annmarie
1 year ago
No, I disagree. I believe the correct answer is B) $170,000. The gain on reacquisition and retirement of bonds is the key here.
upvoted 0 times
...
Cassie
1 year ago
I think the answer is C) $360,000. That gain on the disposal of a component of a business seems significant.
upvoted 0 times
...
...
Johnetta
1 year ago
Hmm, let me think about this. If the bond reacquisition gain is considered unusual, then we can't include that. But the business disposal gain and the equipment abandonment loss are both infrequent, so we add those together. That makes the answer B) $170,000. Wait, is that the right answer? I hope I'm not, like, totally off base here.
upvoted 0 times
Kenny
1 year ago
But remember, we're looking for the total infrequent net gains that are not considered extraordinary. So, the correct answer should be B) $170,000.
upvoted 0 times
...
Erin
1 year ago
Yeah, I agree. So, if we add the $260,000 gain on the disposal of a business component and the $90,000 loss on equipment abandonment, we get $350,000.
upvoted 0 times
...
Bok
1 year ago
Got it. So the total infrequent net gains that are not considered extraordinary for Adam Corp. in 1989 would be $170,000. That's the answer B).
upvoted 0 times
...
Delbert
1 year ago
Yeah, that's correct. So, we add the $260,000 gain on the disposal of a component of a business and the $90,000 loss on the abandonment of equipment to get $170,000.
upvoted 0 times
...
Yen
1 year ago
I think you're on the right track. We should exclude the bond reacquisition gain and just focus on the business disposal gain and equipment abandonment loss.
upvoted 0 times
...
Rebecka
1 year ago
I think you're on the right track. We should exclude the bond reacquisition gain and just focus on the business disposal gain and equipment abandonment loss.
upvoted 0 times
...
...
Adell
1 year ago
This is a tricky one, but I think I got it. The bond reacquisition gain is unusual, so we can't include that. But the business disposal gain and the equipment abandonment loss are both infrequent, so we add those together. That gives us B) $170,000. Easy peasy!
upvoted 0 times
Lettie
1 year ago
Great job! It's always important to carefully analyze each transaction.
upvoted 0 times
...
Tamie
1 year ago
Yes, that's correct. And that gives us a total of $170,000.
upvoted 0 times
...
Robt
1 year ago
So, we add the business disposal gain and the equipment abandonment loss, right?
upvoted 0 times
...
Antonette
1 year ago
I think you're right, we should exclude the bond reacquisition gain.
upvoted 0 times
...
Malissa
1 year ago
Great job! It's always important to carefully consider each transaction.
upvoted 0 times
...
Alfreda
1 year ago
Yes, that's correct. And that gives us a total of $170,000.
upvoted 0 times
...
Kimberlie
1 year ago
So, we add the business disposal gain and the equipment abandonment loss, right?
upvoted 0 times
...
Sharen
1 year ago
I think you're right, we should exclude the bond reacquisition gain.
upvoted 0 times
...
...
Jean
1 year ago
I'm leaning towards D) $450,000 because all the gains and losses should be considered.
upvoted 0 times
...
Torie
1 year ago
I disagree, I believe the answer is C) $360,000.
upvoted 0 times
...
Andree
1 year ago
I think the answer is B) $170,000.
upvoted 0 times
...
Ellen
1 year ago
I'm not sure, but I think the correct answer is D) $450,000.
upvoted 0 times
...
Leeann
1 year ago
I disagree, I believe the answer is C) $360,000.
upvoted 0 times
...
Denny
1 year ago
Wait, wait, wait. I'm pretty sure the question says the bond reacquisition gain is considered unusual, not just infrequent. That means we can't include it, right? I think the answer is A) $100,000.
upvoted 0 times
Markus
1 year ago
I agree, the answer should be A) $100,000.
upvoted 0 times
...
Teri
1 year ago
That would make the total infrequent net gains $100,000, which matches option A.
upvoted 0 times
...
Filiberto
1 year ago
So, we should only consider the gain on disposal of a component of a business and the loss on the abandonment of equipment.
upvoted 0 times
...
Jerilyn
1 year ago
I think you're right, we can't include the bond reacquisition gain since it's considered unusual.
upvoted 0 times
...
...
Eugene
1 year ago
I think the answer is B) $170,000.
upvoted 0 times
...
Gabriele
1 year ago
Hmm, let's see... The gains from the bond reacquisition and business disposal are infrequent but not extraordinary, and the loss from the equipment abandonment is also infrequent. So, we need to add the gains and subtract the loss to get the total infrequent net gains. Looks like the answer is B) $170,000.
upvoted 0 times
...

Save Cancel