[jeff]

Welcome to the Q2 2017 CPA Exam Study Group for FAR. 🙂

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[mtaylo24]

@cruzer I'm still going to use Gleim then switching to Ninja notes and MCQ when I'm about 3 weeks out. Not trying to change a lot from last time, I just hope that I will add the few points that I need. The new Gleim interface is kind of annoying, and they got rid of the audio powerpoint slides. The Gleim sims were helpful last time, but I still dropped the ball and scored weaker on the actual exam.

AUD - 1st - 60 (12/12), 61 (2/13), 61 (8/13), 78! (11/15)
REG - 55 (2/16) 69 (5/16) Retake(8/16)
BEC - 71(5/16) Retake (9/16)
FAR - (8/16)

[Anthony]

I've jumped the Gleim bandwagon also, really hoping it get me through and slay this beast.

I'm doing OK, on MCQ about 1.7k done with about 75-78ish cumulative average with about 4-5 spots where I'm averaging less then 75. Trying to do about 5-10 sims a day on top of my MCQ.

[krstnam]

Anybody able to help with a question???

Roth rec'd a 1 year $500K 8% note. The note was held for 6 months, discounted and given an effective interest rate of 10% and sold. How much did Roth receive in proceeds.

Answer:
Face 500K
Plus int 40K
Mat Val 540K

Discount (10%x1/2year) = 5%

540Kx5% = 27K
540K-27K = 513K

My question: Why do we use the maturity value of the note including the entire 8% interest? How come we wouldn't use the half year of interest at 20%?

Help please??

[HoldMyBeerCPA]

Hey krstnam, does the question specifically ask how much cash proceeds was received on the note?

If so, I was under the assumption that we present value the face value and the interest payment at the effective rate to determine what amount of the face value of the note is cash proceeds and which amount is a discount

PV Factor of $1 at 10% for one period: 0.9091 * 500,000 = 454,550
+
PV Factor of OA at 10% for one period: 0.9091 * 40,000 = 36,036

Cash Proceeds = 490,586
Discount = 9,414

Someone please let me know if my understanding is incorrect!

[Anonymous]

@krstnam this means if you held the note for the full 12 months you would get proceeds of 540K, instead you held it for 6 months and got cash from the bank in the amount of 513K (with an effective rate 10% which covers only for the months left that the bank will owe the note). So when you calculate the proceeds from the bank your starting point would be what you would get if you held it for the full 12 mo with an effective rate of 10%. Does this help or am i making it more confusing?

[HoldMyBeerCPA]

I just came across this question in the Becker book and now I'm totally confused.

My apologies if I caused any confusion as I thought this related to bonds payable.

[AROBanks]

I'm studying for FAR now but a bit concerned about my other scores. Do you think my scores mean I need to study more/harder for this section? I cut it pretty close for both.

BEC 78
AUD 77
FAR Next
REG ?

[IwannabeaCPA2017]

Hey, can anyone give me any suggestions on what I should do. I got FAR and AUD left and AUD was my most recent exam.. failed with 72 in March and 74 back in Oct. BEC is expiring in AUG and my state board isn't granting an extension (most likely). Should I stick with AUD or should I circle to FAR? I won't be studying until next week possibly just need to regroup. Thanks!

[Spartans92]

Thanks @mtaylo! Im sitting on May 25th as of now but IDK if i can commit to the exam since busy season is still going on. I may knock it back to July if anything happens that should give me ample time. I rather be done than to rush and take again in OCT.
@claudia, its great to see ya again.. well, not that great but u know what I mean.. U got a pretty brutal schedule there!! REG and FAR. Is your state extending your scores?? Best wishes to you.

BEC- PASS

[Accountingbeans]

For those studying, are you using the updated 2017 textbook? I have the 2016 one and haven't started studying yet, should I get the new one? If so, how do I go about doing that?

Newbie
BEC- August 31

[007]

@Amber I don't think you can gague how well you'll do on one test vs another based off one of your other test scores. The whole scoring system is one big mind game. I literaly just put an amount on 3 of my sims because I was running out of time, and still somehow passed. But I would say people put the most time into FAR just based on the amount of info that is tested.

@Iwannabeacpa2017 I don't understand why so many states are reluctant to grant extensions since you are losing a testing window pretty much. I would say take AUD first since that information is still fresh, and hit FAR after that with everything you have left in the tank.

[Anonymous]

@krstnam thanks for posting this. It forced me to review discounting receivables 🙂 Here's how I solve them, if it helps:

Step 1 – calculate maturity value – face value x annual int rate x term of the original note
Step 2 – calculate bank value at maturity – step 1 x discounted int rate x how long bank will hold it (ie. 6/12 for half year)
Step 3 – calculate cash the bank gives you – step 1 – step 2

So, I wouldn't take into consideration how long I held the note before I sold it to the bank until Step 2. I can't explain why its done this way without confusing myself, but I can answer the MCQs by memorizing these steps.

[mtaylo24]

Other than the format, any major changes this quarter? I know it was equity method, deferred taxes and LCM/LCNRV last window.

AUD - 1st - 60 (12/12), 61 (2/13), 61 (8/13), 78! (11/15)
REG - 55 (2/16) 69 (5/16) Retake(8/16)
BEC - 71(5/16) Retake (9/16)
FAR - (8/16)

[Anthony]

I'm pretty sure that is all.

[Spartans92]

@mtaylo, I know LCM and the DTL stuff what about equity? how is it changing?

BEC- PASS

[Author]

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