- This topic has 373 replies, 120 voices, and was last updated 7 years, 4 months ago by
Tncincy.
-
CreatorTopic
-
December 11, 2017 at 10:57 am #1676690jeffKeymaster
Welcome to the Q1 2018 CPA Exam Study Group for FAR. 🙂
Introduce yourselves and let your fellow NINJAs know when you plan to take your exam.
The Five Steps (NINJA Framework): https://www.another71.com/pass-the-cpa-exam/
-
AuthorReplies
-
March 5, 2018 at 2:52 am #1724335AnonymousInactive
For the LOC (letter of credit), it’s an off balance sheet disclosure. Per GAAP, assets, liabilities, revenues, and expenses are only recognized when they actually happen. Since a LOC guarantees a future liability, there's no actual liability to recognize. As a result, LOCs are disclosed as a footnote to the BS.
If I remember it right, property insurance claim in the tutorial test was a gain contingency example. The claim (which has not been received) comes with a deductible. The net proceeds will be a gain later, so only disclosure is required, not accrual.
March 5, 2018 at 8:36 am #1724399AnonymousInactiveDoes anyone know which questions in ninja McQ directly correlate to the new contract revenue recognition stuff? I've listened to it in ninja audio but want to make sure I have a solid understanding before test this week.
March 5, 2018 at 10:25 am #1724599cpandaParticipantHas anyone figured out how to do the second to last AICPA sample test SIM for tests during April?
Oak Co. is preparing its financial statements as of and for the year ended December 31, year 5. Review the exhibits above to identify any adjustments required to the draft income statement for the year ended December 31, year 5.
Does anyone know how the interest expense adjustment of 11,250 was found? (Box C13)
I couldn't figure it out using the LIBOR rates?
March 5, 2018 at 11:07 am #1724632AnonymousInactive@becomingkdcpa, another poster here—Lentilcounter laid out this outline from https://www.another71.com/cpa-exam-forum/topic/potential-far-simulation-topics-straight-from-the-aicpa/
Hopefully, you can find here what you’re looking for. Good luck!
Here is the list of Ninja FAR sims. I have gone through and annotated the topics with a little more detail.
2017 NINJA MCQ FAR SIMS
FAR Simulation 1: Cash Flow
FAR Simulation 2: Capital Accounts
FAR Simulation 3: Research
FAR Simulation 4: Long-Term Receivables
FAR Simulation 5: Current portion of long-term receivables
FAR Simulation 6: Income Statement – interest revenue + gains recognized on the sale of assets
FAR Simulation 7: Research
FAR Simulation 8: Journal Entries – Leases
FAR Simulation 9: Balance Sheet – Intangibles
FAR Simulation 10: Income Statement – Expenses from intangible transactions
FAR Simulation 11: Research
FAR Simulation 12: Units of Production – depreciation
FAR Simulation 13: Sum-of-the-Years'-Digits – depreciation
FAR Simulation 14: Classification of securities
FAR Simulation 15: Research
FAR Simulation 16: Price – bonds
FAR Simulation 17: Journal Entries – bonds
FAR Simulation 18: Schedule – cost recovery method
FAR Simulation 19: Journal Entry (1) – nonmonetary transactions
FAR Simulation 20: Journal Entry (2) – nonmonetary transactions
FAR Simulation 21: Research
FAR Simulation 22: Gains and Losses – income statement classification
FAR Simulation 23: Treasury Stock – cost method
FAR Simulation 24: Dividend – transaction journal entries
FAR Simulation 25: Par Value Method – treasury stock
FAR Simulation 26: EPS – earnings per share
FAR Simulation 27: Classification – accounting changes and error corrections
FAR Simulation 28: Accounting Treatment – retrospective, restatement, prospective approach classification
FAR Simulation 29: Chart – accounting changes and error corrections
FAR Simulation 30: Liquidity and Efficiency – balance sheet and income statement ratios
FAR Simulation 31: Leverage and Profitability – balance sheet and income statement ratios
FAR Simulation 32: Depreciation Exp. – depreciation
FAR Simulation 33: Accumulated Depreciation – depreciation
FAR Simulation 34: Gain/Loss – disposal of assets
FAR Simulation 35: Amortization – of intangibles
FAR Simulation 36: Adjustments – accruing for events
FAR Simulation 37: Research
FAR Simulation 38: Average Cost – inventory valuation
FAR Simulation 39: LIFO – inventory valuation
FAR Simulation 40: FIFO – inventory valuation
FAR Simulation 41: Theory – financial statement disclosure/adjustments
FAR Simulation 42: Accounting Treatment – stockholder's equity
FAR Simulation 43: Research
FAR Simulation 44: Funds – governmental accounting
FAR Simulation 45: Basis – governmental accounting
FAR Simulation 46: Major Funds – governmental accounting
FAR Simulation 47: CAFR – governmental accounting
FAR Simulation 48: Bond Issue Price – bonds
FAR Simulation 49: Interest Expense – bonds
FAR Simulation 50: Bonds and the balance sheet
FAR Simulation 51: Allowance Calculation – AR aging schedule
FAR Simulation 52: Journal Entry – AR aging
FAR Simulation 53: Research
FAR Simulation 54: Constr. Interest Capitalization – Construction interest capitalization
FAR Simulation 55: Research
FAR Simulation 56: Adjusted Trial Balance – adjusting a trial balance
FAR Simulation 57: Intangible Asset Entries
FAR Simulation 58: Research
FAR Simulation 59: Contingent Liabilities – accrual or disclosure?
FAR Simulation 60: Bonds – journal entries
FAR Simulation 61: Research
FAR Simulation 62: Research
FAR Simulation 63: R&D Activities – capitalize, amortize, expense, etc. (a type of DRS)
FAR Simulation 64: Cash Reconciliation – bank rec
FAR Simulation 65: Research
FAR Simulation 66: Interest Expense – loan journal entries
FAR Simulation 67: IFRS Business Acquisition
FAR Simulation 68: ResearchMarch 5, 2018 at 11:36 am #1724668AnonymousInactiveCan someone please tell me the journal entry for this accounting traction? Thanks.
March 5, 2018 at 2:08 pm #1724881shawn0216ParticipantHello all,
I will be taking FAR this coming Friday, 3/9 and this will be my fist section ever. I have completed Chapters 1-6 on Becker and still have 7-10 remaining. Currently feeling super overwhelmed… I understand that Gov/NFP is heavily tested so I am thinking about skipping Ch7 for now (Pensions/Equity) and get as much done for Ch8-10. Could anyone provide any advice on how I should start reviewing (cramming) before my exam on Friday? What MCQs/Sims to watch out for, what areas to focus on, etc.
Anything will help me at this point. Thanks to whoever responds!
March 5, 2018 at 5:07 pm #1725250MeanJoeParticipant@cpanda
I went through the AICPA sample tests yesterday.
Under the Debt Agreement Memorandum it states:
“The following summarizes the key terms of the debt agreement entered into by Oak Co. and National Bank on January 1, year 5:
Principal amount: $10,000,000
Semiannual principal repayments: $1,000,000 beginning July 1, year 5
Variable interest: six-month LIBOR as quoted at the beginning of each semiannual period plus 2.5%
Principal and interest payments due: July 1 and January 1
Maturity: January 1, year 10″Under the additional information tab you are told that:
“Six month LIBOR as of the following dates:
January 1, year 5 — 1.25%
July 1, year 5 — 1.50%
January 1, year 6 — 1.35%”And finally under the Interest Expense General Ledger Detail we are show (forgive the formatting):
Posting Date Accounting Period Description Amount ($)7/1/year 5 6 Semiannual interest payment 187,500
12/31/year 5 12 Semiannual interest accrual 168,750
Total 356,250 – This is what is currently recorded on the I/S. Is this correct? No.
1-1-yr5 $10,000,000 Principal balance x interest rate of LIBOR at 1-1-yr5 of 1.25% + 2.5% for a total interest rate of 3.75%
1-1-yr5 $10,000,000 Principal x 3.75% = $375,000 x 6/12 = $187,500 interest expense for the period of 1-1-yr5 through 6-30-yr5. This agrees with the general ledger detail so no adjustment is needed for the 1st six months.
7-1-yr5 $1,000,000 principal payment made. So outstanding balance is now $9,000,000. We have to figure out the interest rate again which is the LIBOR at 7-1-yr5 of 1.50% + 2.50% for a total of 4%.
7-1-yr5, $9,000,000 principal outstanding x 4% = $360,000 x 6/12 = $180,000.00 interest expense for the period of 7-1-yr5 through 12-31-yr5.
It looks like originally they never updated the LIBOR rate and use 3.75% for the second half of year 5 which equated to $168,750.
The difference between what was recorded of $168,750 and what should have been recorded $180,000 is $11,250.
The same would be for total interest expense of what was recorded, $356,250 and what should have been recorded, $367,500. A difference of $11,250.
And since it was understated you need to increase the interest expense to correct it.
March 5, 2018 at 6:02 pm #1725298SONAParticipant@Amor
JE will be DR Notes payable 1500000
CR C/s 100000@15 – 1500000Try to make T account then it becomes easy to figure out.
March 5, 2018 at 7:21 pm #1725364PamParticipant@shawn0216 – I think trying to get through that many chapters in 3 days is a lot. Maybe at this point, do the MCQ's find out your weaker areas and review those? If you're going to guess, make sure it's wrong so you don't skew your score.
This is my 2nd round with FAR (my last section needed!) I'm also going in on Friday. I haven't put nearly as much time/effort as I have wanted to in the last month to (re) prepare for this. I've re-written all the notes, listened to the audio and now I'm focusing on my weaker sections, 2 at a time, through MCQ's. I'm hoping by Thursday (I'm off half tomorrow and all day Wednesday & Thursday) I can do simulations all day. I go in Friday at 1pm, so I'm going to study that morning and pray my last 30 min.
Best of luck!March 5, 2018 at 7:37 pm #1725370shawn0216Participant@Pam – Thanks for the feedback and encouragement!
Are you using Becker? If so, have the Mock Exams helped you? And as far as the simulations go, should I practice more of the simulations at the end of each chapter or all of the Skills Practice simulations? This will be my first exam, so I am not quite familiar with the format of the simulations. Also, I hear that the actual simulations are very difficult compared to the ones provided in Becker. Is there a way to strategically assume which simulations we will be tested on?
I hope you finish strong, Pam!
March 5, 2018 at 7:40 pm #1725382gguzmanParticipantI think I am just really stupid compared to the average person or something. I am doing 2 chapters a week and I have not had any time to do any of the SIMS, and some of the MCQ I am completely lost on. This is also my second time through, which is why I thought this would be enough.
I feel like such an idiot. I feel like shit moving onto the next chapter without understanding the last one and not completing any sims, but if I don't I won't finish. should I be progressing faster?
I am Working full time, I figured out I do not retain knowledge in the morning so I try to get in 4-5 hours a night, no time for a day off now.
I am really frustrated and doubting my existence.
March 5, 2018 at 9:15 pm #1725493jayjack25Participant@Amor @Sona. The exact JE for the partial retirement of the Note Payable depends on the par value of the common stock issued. Assuming Par value is $5,it should look like:
Dr. Note Payable $1,500,000
Cr. Common Stock $500,000 (100,000 x $5)
Cr. APIC $1,000,000 (100,000 x ($15-$10))The remainder of the Note payable ($250K) would be classified as a Current Liability.
In regards to the Contingencies question about Loan Guarantee we discussed earlier, Gleim Book has the explanation in its outline:
“A guarantee is a noncontingent obligation to perform after the occurrence of a triggering event or condition. It is coupled with a contingent obligation to make payments if such an event condition occurs. Thus, the recognition of a noncontingent liability is required even when it is not probable that payments will be made.
The initial measurement of Non Contingent Liability obligation is at Fair Value.
If a contingent loss and liability also are required to be recognized, the liability recognized by the guarantor is the greater of the Fair Value measurement or the contingent liability amount. ”March 5, 2018 at 9:42 pm #1725509DoubleBogeyParticipantHey everyone, have FAR on Thursday and am working on hammering out the kinks in FAR that I cannot stand: Pensions, Troubled Debt, and T Stocks. Any last minute advice for what I should do in the final 2 days of prep before I mind dump everything since the new year into a 4 hour exam?
Good luck everybody!
March 6, 2018 at 8:54 am #1725740cpandaParticipantMarch 6, 2018 at 9:47 am #1725766AnonymousInactive@cpanda-Interest is definitely operating, i would think loan principal is financing activity as it's used to finance the operations of the business….
@gguzman-FAR will make anyone doubt themselves…My advice is to try to quell the self-doubt and if it takes longer, just move at your own pace. Also, when you get things wrong in MCQ-don't think of it as failure-think of it as a learning experience. Make sure you learn from those incorrect ones-that's all that matters. For my re-take I left SIMS for the end and it actually worked great, but we will see on Thursday!
-
AuthorReplies
- The topic ‘FAR Study Group – Q1 2018 - Page 21’ is closed to new replies.
