[jeff]

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

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

[cpa83]

Hi All,

I am taking FAR in July 17. I have 2016 FAR material for yaeger and roger. Do you think i need to buy 2017 version? Or is 2016 still compatible. Please help!

[Zara]

Rice Co. was incorporated on January 1, 20X1, with $500,000 from the issuance of stock and borrowed funds of $75,000. During the first year of operations, net income was $25,000. On December 15, Rice paid a $2,000 cash dividend. No additional activities affected owners' equity in 20X1. At December 31, 20X1, Rice's liabilities had increased to $94,000. In Rice's December 31, 20X1, balance sheet, total assets should be reported at

$600,000

$692,000

$617,000

$598,000

the correct answer is 617,000, could someone please tell me why isn't the borrowed funds included in the calculation?

[Anonymous]

Shouldn't that be part of your liabilities?

[mckan514w]

Your liabilities increased- from what you borrowed $75,000 to 94,000…. the 94 includes what you initially borrowed.

and they ask me why I drink...

FAR- 61-next time I'll ask for lube instead of a calculator
REG-75- Never been so happy to see such a low grade
BEC- 8/11
AUD- 9/2

[Anonymous]

Someone correct me if I'm wrong but I think the wording implies that the borrowed funds are included in liabilies increase of 94,000 (at year end) so when I read the question I wouldn't include it on my calculation since the increase already captures it.

[Zara]

@mckan514w Thanks a lot !!! It makes sense now 🙂

[Zara]

Thanks @automn3 !!

[Anonymous]

@zara anytime 🙂

[Anonymous]

I know a lot of people are not liking the new becker format- but so far i really like the “skills practice”. it's like a summary but with long exercises.

[Spartans92]

Man I have been so lazy this whole week.. The new becker takes so much more time than the old one. Should I skip the lectures and go straight to reading? I only did module 1 of chap 1 so far. Feel ashamed.

BEC- PASS

[Anonymous]

@Spartans92 hmm maybe you should do: read=>skills practice=>MCQ

[Spartans92]

@auto, how u like the skills practice? I find them to be helpful but they are still time consuming LOL. Just feel like taking shortcuts. 🙁

BEC- PASS

[Anonymous]

@spartans92 no shortcuts lol you need the section summary to refresh 🙂

i like them a lot, found those to be more helpful than the lectures (they arent so bad, 1 hour max so far). what i've been doing: read,skills then mcq (sims on weekends and writing my notes).

[RunRumRun]

@chynablue Thanks- This should help me on narrowing down what to study! I know you have to do this J/E- but I could't tell you WHY it has to be that way!

Can anyone explain why a write off of A/R will result in No effect on either net income or total assets.

J/E
Allowance
A/R

Wouldn't the Credit to A/R reduce your total assets(as A/R is an asset itself)?

[Anonymous]

ok so by debiting your allowance of doubtful accounts your assets will go up (you are reducing a contra asset), then you reduce/credit A/R which will bring down your asset… does this make sense? so you are only doing these JE on the B/S

I think you might be missing the fact that allowance is a contra asset acct (which has opposite natural balances compared to an asset acct)…

[Author]

Replies