[jeff]

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

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

[Yo831CA]

Hello Friends, hope all is fine and dandy with your study. have a hard time understanding this question and appreciate your inputs.

Key Corp. issued 1,000 shares of its nonvoting preferred stock for all of Lev Corp.'s outstanding common stock. On the date of the transaction, Key's nonvoting preferred stock had a market value of $100 per share, and Lev's tangible net assets had a book value of $60,000. In addition, Key issued 100 shares of its nonvoting preferred stock to an individual as a finder's fee for arranging the transaction. As a result of this business combination capital transaction, Key's total net assets would increase by:

$‐0‐

$60,000

$100,000(Correct)

$110,000

My answer was $0.00 since it's asking about the net assets which has a net effect of zero. ( Increase in investment was washed by a reduction in the cash). Correct me if i am wrong, please.

Thanks!!

[CPAIN2K17]

@Yo831CA No cash was paid… the stock was issued for the acquisition. You use FV for business acquisitions. FV of the stock is (1,000 shares x $100 per share = $100,000).

[Anthony]

@Yo831CA This is business combo problem. Assets would have went up 100k from the investment and goodwill:

Dr: Investment of net book value at FV 60k
Dr Goodwill 40k
Cr: Preferred stock 100k

[Yo831CA]

Thank you @CPAIN2K17 & @Anthony

[taxfreak]

can someone tell if there has been an update on the progress tests from BECKER on FAR because currently there are SO many questions (200-350 per testlet)

[Cruzer]

Don't know why but I feel like this is a great exam question for some reason.

Cott, Inc., prepared an interest amortization table for a 5-year lease payable with a bargain purchase option of $2,000, exercisable at the end of the lease. At the end of the five years, the balance in the leases payable column of the spreadsheet was zero. Cott has asked Grant, CPA, to review the spreadsheet to determine the error. Only one error was made on the spreadsheet. Which of the following statements represents the best explanation for this error?

A.The beginning present value of the lease did not include the present value of the bargain purchase option.

B.Cott subtracted the annual interest amount form the lease payable balance instead of adding it.

C.The present value of the bargain purchase option was subtracted from the present value of the annual payments.

D.Cott discounted the annual payments as an ordinary annuity, when the payments actually occurred at the beginning of each period.

[Anonymous]

Becker F4M3Skill Practice Q2: Does Thompson have any obligation to absorb expected losses?

[mtaylo24]

@cruzer A?

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]

Just started the Ninja MCQ phase to take me to test day. Getting close!

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)

[CPAIN2K17]

@cruzer I think A also. At the end of the lease the balance in lease payable should be the BPO. failing to include the BPO in the beg PV of the lease would result in the BPO not showing in the ending balance.

[Holly]

@mtaylo24 I need some advice on how you handled studying FAR and BEC at the same time. I'm considering doing this for BEC and REG since I can't get in for BEC until July as of right now.

BEC - 79
REG - 85
AUD - 5/27/16

[mtaylo24]

@Holly Unfortunately, I had history with both sections, but I went Gleim first 2 1/2 months, then turned on Ninja 3 weeks prior to the exam. I pretty much flipped flopped after every chapter, went 20 MCQs for 20 MCQs. 20 MCQs got exhausting so I ended up around 100 for 100 towards the end. I dropped FAR for 3 days to focus soley on BEC, which I sat for Saturday, picked up FAR after my BEC exam and cranked it out until the next Friday. I pulled all-nighters for both leading into the exam cranking nothing but Ninja MCQs, with a Gleim WC or Sim here or there. For WC I just read examples, for sims I just studied the answer explanations. Would have been great if I had those 3 extra points 🙂

#bringbackHRSexton

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)

[Holly]

@mataylo24 Thanks! I literally laughed out loud at your hashtag!!!
I had to reschedule BEC and the closest date I could get that was doable is 7/6. That's too far because I'm almost prepared and I'd like to get this stuff over and start REG. I think if I can finish this month preparing for BEC and work in REG in June, I could take both in July. Not sure. I was super impressed when you did it – you passed one and gained almost 20 points on another so don't sell yourself short.

BEC - 79
REG - 85
AUD - 5/27/16

[mtaylo24]

Appreciate it Holly. Make some flashcards w/ BEC to keep everything fresh while studying Reg. I know you will easily pass both for sure if you breezed through Audit and Far. Best of luck!

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)

[CPAIN2K17]

@mtaylo are you gonna try and see if any seats open up around May 31 or are you good to go with the 23?

[Author]

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