[jeff]

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

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

[Wannafree]

5 DRS sims ? Really ? Can you share the link please ?

[mtaylo24]

It's in that Reg sim thread

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)

[Wannafree]

Got it MTaylo,saw that thread ,just can't believe it.There are many on this forum who shared FAR exam experiences have said max 2 DRS.

Silver lining , will be able to attempt 6 SIMs (5 DRS and 1 Research ) as in DRS you have to just guess and select , no filling the filed with numbers.Positive attitude ,LOL

[Wannafree]

@mTaylo24 , “^^^^Alright Scholar…easy now lol!” you cracked me up.

[SallyCPA]

On January 2, 20X1, Well Co. purchased 10% of Rea, Inc.'s, outstanding common shares for $400,000. Well is the largest single shareholder in Rea, and Well's officers are a majority on Rea's board of directors. Rea reported net income of $500,000 for 20X1, and paid dividends of $150,000. In its December 31, 20X1, balance sheet, what amount should Well report as investment in Rea?
A.

$450,000
Correct B.

$435,000
C.

$400,000
D.

$385,000

The issue here is whether Well Co. should apply the equity method to its investment in Rea, Inc. According to FASB ASC 323-10-15-6, if the investor can exercise significant influence over financial and operating policies of the investee, the equity method should be used.

Significant influence may be indicated by “representation on the board of directors” as well as “the extent of ownership…in relation to the concentration of other shareholdings….”

It appears that Well Co. does exercise significant influence over Rea, Inc. Therefore, the equity method should be used in accounting for the investment. Even though the amount of stock ownership is less than 20%, the investment account balance as of December 31, 20X1, would be computed:

————–

I got this question right and this may be a stupid question but I was just curious as to how 10% of CS ownership can be considered the largest share-holder? Its a very easy question but small details are a killer.

[Anthony]

It could be that the other shareholders only own less then 10%, thus making Well Co. the largest shareholder. So for example one shareholder own 5% and another 2% ect ect, but none own more than 10%.

[Wannafree]

In Corporate democracy you need not have to have 51% to get the influential on board or majority shareholder.It's like multi party Parliamentary system.
So other shareholders are having less then 10% shares and don't have any association to use their proxies.
Majority of minor shareholders absent during voting ,this is how hostile investors take over the company.
Cream of question : even if its less then 20% use Equity method.

[Wannafree]

@Anthony the way most of the people on forum are explaining their FAR exam experience ,particularly SIMs I feel you will pass for sure .100%.Anyway you just missed last time for 1 marks and that's was tough,you deserve pass.

[SallyCPA]

Thank you @Anthony and @WannaFree, when do you guys take FAR?

[Wannafree]

You are welcome SallyCPA,I am taking on 30th May .LOL really pushed to last day.

[Jj]

The following information pertains to Eagle Co.'s 20X1 sales:

     Cash Sales
       Gross                         $ 80,000
       Returns and allowances           4,000
     Credit Sales
       Gross                          120,000
 Discounts                        6,000
On January 1, 20X1, customers owed Eagle $40,000. On December 31, 20X1, customers owed Eagle $30,000. Eagle uses the direct write-off method for bad debts. No bad debts were recorded in 20X1. Under the cash basis of accounting, what amount of net revenue should Eagle report for 20X1?

B.
 
$170,000

C.
 
$190,000

D.
 
$200,000

I thought because its cash basis the credit sales aren't included in revenue? the answer is D. 200,000. Can someone help me out

[justa75pls]

I know this question gets asked a lot, but are two weeks of review enough?

[CPAIN2K17]

@beantown you have to figure out how much cash was collected from credit sales in order to get the cash basis revenue. 40,000 beg AR plus 114,000 net credit sales minus 30,000 ending AR equals 124,000 cash received from credit sales. Then you add the $76K received from cash sales and you get $200,000. Remember, under cash basis accounting, the cash received counts as revenue in the period it's received. So, even the cash recieved from the credit sales is included.

[mexicanbear]

@justa75pls I wouldn't push it back to July if that is what you are asking. I think 2 weeks is enough but just depends on you. I know people who have people who passed with a week of reviewing. I'll be taking it Monday with about a week to review… hoping for the best

[Wannafree]

Just doing practice of simulations.You may laugh ,I am selecting really long questions from Undergraduate textbook and trying to solve it in 25 minutes.
I wish they don't give SIM to prepare the Consolidated Cash Flow statement.It took me 38 minutes.
I wish they give to calculate the pension liability or one SIM on Bills Payable or Bond Carrying cost or ARO. It is taking me now 11-14 minutes along with JE.
Preparing F/S from trial and addendum to problem,taking 28-35 minutes ,need to compress further to 25 minutes.
IFRS SIM: Expecting Inventory ,Goodwill ,Impairment or Intangible (R&D) to be calculated as per GAAP and then as per IFRS and AJE as per GAAP.(able to do in 18 minutes ).
My wish list is based on Becker's review ,I have noted where they are stressing and speculating these SIMs,no scientific basis.Only one logic , AICPA loves to give problems which you can't solve 100% correct unless you have seen the formula just night before exam.
All right scholars ,why don't you highlight Financial statements and go right then go left , We highlight everything red so you pass the CPA exam .LOL
You all are most welcome to share your wish list SIM.

[Author]

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