[jeff]

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

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

[Me!]

Hi everyone! I only post occasionally but check on here daily. I want to wish every that the CPA gods will give you a pass, especially for those of us working on the last one! I am taking FAR on the 31st after a 70 last quarter. I am so sick of MCQ's! I am hoping that the new grading and the additional time studying will give me at least a 75 and everyone else too. Hopefully we will be celebrating come August.

[HottyToddy]

Can anyone help me better understand the difference between a private-purpose fund and an agency fund? I know private-purpose is for a specific entity or individual but it seems that can also apply to agency funds as well, so I am constantly getting them wrong on MCQ questions.

[Jj]

Tim Gearty seems like a really nice guy, but I literally can't watch lectures at this point because his voice makes me cringe… does this mean I'm test ready

[Me!]

HottyToddy:
Agency funds are funds designated for another government agency – simple example: State has funds that are due to a County or City or some other GOVERNMENT entity.
Where as Private Purpose are funds designated for NON-GOVERNMENT entities/individuals – simple example: Scholarship Funds.

[Wannafree]

1.Private purpose trust funds
a.Reports all other trust arrangements where the principal and
income benefits individuals.
Scholarship fund for a public school system.
2.Agency
Reports resources held by the reporting entity in a purely
custodial capacity for other Agency (dept).
In exam they may ask JE like Dr Cash ,Due to
Cr Cash ,Due from
Inter fund transfer mostly or reimbursable expense for other Agemcy.

Report assets and liabilities only
Not included in the Statement of Changes in Fiduciary Net Assets

[Wannafree]

…

[justa75pls]

@WannaFree I definitely think you're going to pass this time around. When are you taking the exam?

[mtaylo24]

Can someone help me out with this trick Ninja MCQ? Why are we using .78 (90-day) rather than .79 (30-day @ 11/1)?

The following information pertains to Flint Co.'s sale of 10,000 foreign currency units under a
forward contract dated November 1, 20X1, for delivery on January 31, 20X2:

11/01/X1 12/31/X1
——– ——–
Spot rates $0.80 $0.83
30-day future rates 0.79 0.82
90-day future rates 0.78 0.81

Flint entered into the forward contract in order to speculate in the foreign currency. In Flint's
income statement for the year ended December 31, 20X1, what amount of loss should be
reported from this forward contract?
A. $400
Incorrect B. $300
C. $200
D. $0
You answered B. The correct answer is 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)

[CPAIN2K17]

On 11/1, you use the 90 day rate because the settlement date is 90 days away. On 12/31 you use the 30 day rate because the settlement date is 30 days away. .78-.82 =.04*10,000=$400

[mtaylo24]

@cpain2k17, So it would normally just be classified as one forward rate under normal circumstances, but they are trying to throw us off by providing two?

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]

Your question”rather than .79 (30-day @ 11/1)?” please read again , from 1st Nov to 31st Jan it's 90 days .
On 11/01/X1, you enter into a forward contract to sell currency on January 31, 20X2, you will look at 90 Days future rate, ie. 0.78. Meaning you are selling $10000 foreign currency for $7800.

On 12/31/X1, balance sheet date, you will look at the 30 Days future rate, ie. 0.82.

So you recognize a loss of $8200-7800 = 400
BTW I had tripped on this question too.

[Wannafree]

MTaylo, in forward and option what is in money rate is important hence you take into account what is now remaining not past.You tying to bet on future rate not on past.Hope I make sense.It may give you three rates (30,60,90 ) u have to find out on which date you are valuing.

[mtaylo24]

@Wanna Yup, I see my mistake. I read the last line only and compared 11/1 to 12/31 rather than focusing on “contract dated November 1, 20X1, for delivery on January 31, 20X2”

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)

[Shelby]

Took FAR yesterday – I actually sucked up the MCQ and felt good about *most* of the simulations. I had 5 or 6 DRS's but some aren't too bad. I finished with 24 minutes left using the 45-45-30-60-60 time allocation. I wish I had spent more time on the simulations I had allocated only 30 minutes to and made up the time in the simulation where I got the research tab. If you feel like you want more time, I would recommend giving an extra 10 minutes and lowering your section with research by 10 minutes. You'll know if you don't get it in the first set of simulations.

Also, here's a story from yesterday:

So I just get back from my 15 minute break meaning I'm only half way through the exam. There was another guy in there taking a different section of the CPA exam (BEC I think?) and I hear the testing center folks come in and talking to him. His computer SHUT OFF in the middle of the exam!?! I had a little bit of a heart attack for myself – but then took a couple deep breaths and got my mind back on track. It was distracting for me. I can't IMAGINE what it did for him! They luckily were able to get him on a new computer (after about 10 minutes probably) and he was able to finish the exam I guess. I hope his clock stopped! He actually started one person after me and he left the room before me so he must have been ok. Seriously though – glad it wasn't me!

Now to wait for my FAR and REG exams in August. I lose Audit credit March 31 if I don't pass these two. Then I lose BEC credit 11/30/17. :/ Please – please let me pass!

[Cruzer]

@fallingfaceup sounds like a very similar experience I had. 5 DRS's but they weren't all that bad. I feel like I got 2 of them 100% right and the other 3 maybe 75%. Someone I saw posted every SIMS he had (in great detail) and they looked worse than the ones I had. The post was subsequently deleted due to them violating disclosure rules. SIMS are luck of the draw for sure. DRS's just make you think a little more outside the box.

[Author]

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