[jeff]

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

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

[Anthony]

@TurboSandwich

Ninja definitely don't have anything like this. If you can kill it on Gleim, you'll be doing cartwheel and backflips on Ninja.

I have use Gleim for FAR and it was amazing in terms of learning the material. I definitely has the “spice” I was looking for and which I hope will get me over the hump. I'm using it right now for AUD and getting my ass handed to me. It's an absolute confidence killer.

[HoldMyBeerCPA]

I'm averaging and trending at a score of 78% on NINJA, so I'm assuming that's good for about a 54 on Gleim? Is there a sample test bank of Gleim MCQs out there? I'd like my confidence to be at an all time low heading into the weekend, that way I have nowhere to go but up for exam day 🙂

[mtaylo24]

@turbosandwich I think the Wiley TB might be similar difficulty. Not sure if that applies to the same 14 day as CPAExcel

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)

[aatoural]

@Turbosandwich – Gleim SIMS are great too! I don't know if they currently have a sale on their test bank. If you can get I would say a 70% in Gleim, any other course would be a walk in the park.

BEC - PASSED
AUD - 8/29/16
FAR - TBS
REG - TBS

[SallyCPA]

Does anyone else spend the time to rewrite their notes?

[mtaylo24]

@SallyCPA Unfortunately I don't really take notes.

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)

[richsimms]

Can someone help me wrap my brain around this interest/noninterest bearing note?

Oriental Co. borrowed $1,000,000 from Big City Bank on April 1, Year 1. Principal payments of $100,000 are due annually beginning April 1, Year 2. Annual interest payments will be made in addition to the principal payments. The interest rate on the loan is 6 percent based on current market conditions. All principal and interest payments to date have been paid on time.

Part A: The value of the 6 percent note at December 31, Year 3, is: ?
Part B: The portion of the noninterest bearing note reported in the long-term liability section of the Year 3 balance sheet is: ?

The answers are $800,000 and $700,000.

I'm getting really confused with the scenario. I thought that noninterest bearing notes will not have an interest rate and will not have interest payments, both of which are present in this scenario. Doesn't that make this an interest bearing note?

[HoldMyBeerCPA]

@richsimms, That's a weirdly-worded question. Why would the note have an interest rate of 6%, then in part B, say it's non-interest bearing?

I think this note IS in fact interest-bearing at a “reasonable” rate. As such, the answer of $800,000 being the total value of the note and the $700,000 being the long-term portion makes sense.

However, one thing to note. When it comes to non-interest bearing, long-term notes, the interest rate must be imputed at a “reasonable” interest rate either based on “current market conditions”, or some other factor.

[richsimms]

Thanks for the reply, @TurboSandwich. That makes sense. I hope it is simply a typo (I have found a ton of typos in the 2017 Becker materials). If I understand the material correctly, a noninterest bearing note will always have a discount. Because this scenario says the loan has an interest rate and it is based on “current market conditions”, that seems to imply no discount or premium.

I just spent hours rereading materials trying to figure out what the heck is going on and questioning everything I thought I had learned about notes payable/receivable.

I'm finding this keeps happening with the new Becker materials — so many typos / strangely worded questions, and errors in the newer materials. I'm definitely going to have to get the NINJA MCQ's before I take the exam.

[niunian]

Hi, I got 74 for FAR (my last part) in March, and my Backer was expired. Could anyone give me some advise:
Should I buy a new Becker or can I just buy TB from Gleim? Is the 2016 Becker book still good for 2017?

Thanks a lot.

[Mscfisher]

Good morning all! I'm up bright and early. #letsdothis @mtaylo

[mtaylo24]

@Mscfisher, I'm working on my first set of 20 right now. 14 more to go after this!

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)

[mtaylo24]

The answer is A but wouldn't 50,000 coupons left * ($0.45+$.05) = 25,000 make more sense for liability? What am I missing?

Case Cereal Co. frequently distributes coupons to promote new products. On October 1, Case mailed 1 million coupons for $.45 off each box of cereal purchased. Case expects 120,000 of these coupons to be redeemed before the December 31 expiration date. It takes 30 days from the redemption date for Case to receive the coupons from the retailers. Case reimburses the retailers an additional $.05 for each coupon redeemed. As of December 31, Case had paid retailers $25,000 related to these coupons and had 50,000 coupons on hand that had not been processed for payment. What amount should Case report as a liability for coupons in its December 31 balance sheet?

A. $35,000
B. $29,000
C. $25,000
D. $22,500

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]

Use journal entries.

120k*.5=60k this is the coupons liability/expense that is recorded at first

Dr: Coupon Expense 60k
Cr: Coupon Liability 60k

When Case paid:

Dr: Coupon Liability 25k
Cr: Cash 25k

Ending Balance of the liability account: 60k – 25k = 35k

[mtaylo24]

Thanks @anthony. It makes more sense when its journalized.

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)

[Author]

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