FAR Study Group April May 2017 - Page 93

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  • May 28, 2017 at 9:02 pm #1561716
    Jj
    Participant

    Really hope nothing like that's on the exam… there are way too many variations to asking lifo layer questions

    May 28, 2017 at 9:04 pm #1561720
    mtaylo24
    Participant

    On the actual, I've only encountered simple perpetual ending inv or lcm/lcnrv for inv. Never cost to retail or dollar value lifo ***knocks on wood

    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)

    May 28, 2017 at 9:07 pm #1561723
    Wannafree
    Participant

    Thanks CPAIN2k17.

    May 28, 2017 at 9:37 pm #1561728
    CPAIN2K17
    Participant

    This one can be a little tricky.

    On June 30 of the current year, Lang Co. sold equipment with an estimated useful life of 11 years and immediately leased it back for 10 years. The equipment’s carrying amount was $450,000; the sales price was $430,000; and the present value of the lease payments, which is equal to the fair value of the equipment, was $465,000. In its June 30 current-year balance sheet, what amount should Lang report as deferred loss?

    A.
    $35,000

    Correct B.
    $20,000

    C.
    $15,000

    D.
    $0

    You are correct, the answer is B.

    When a sale of property is made and a gain is realized on the sale, if the seller immediately leases the property back from the new owner, that is sometimes a justification for deferring recognition of the gain on the sale. If the sale of the asset is for a realized loss, as here, of $20,000 (sales price of $430,000 less carrying amount of $450,000), then a loss is usually recognized immediately.

    There is an exception to this, and such is the case here. The loss is realized in the sales price, but the sales price is artificially too low. The asset is actually worth more than its selling price and more than its carrying value. In such a case, the loss is deferred.

    May 28, 2017 at 9:43 pm #1561729
    mtaylo24
    Participant

    Yeah I got burned by that one twice today LOL

    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)

    May 28, 2017 at 10:18 pm #1561747
    mtaylo24
    Participant

    Another ARO any other hot topics?

    Finch Co. reported a total asset retirement obligation of $257,000 in last year's financial statements. This year, Finch acquired assets subject to unconditional retirement obligations measured at undiscounted cash flow estimates of $110,000 and discounted cash flow estimates of $68,000. Finch paid $87,000 toward the settlement of previously recorded asset retirement obligations and recorded an accretion expense of $26,000. What amount should Finch report for the asset retirement obligation in this year's balance sheet?
    A. $238,000
    Correct B. $264,000
    C. $280,000
    D. $306,000

    You are correct, the answer is B.

    The amount is $264,000, computed as follows:

    Total obligation $257,000
    Add: undiscounted cash flow 68,000*
    Accretion expense 26,000
    Deduct: payment (87,000)
    ———
    $264,000

    * The original undiscounted cash flow of $110,000 should be adjusted to the discounted estimate.

    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)

    May 28, 2017 at 10:21 pm #1561750
    Jj
    Participant

    I spent a lot of time on eps- convertible preferred/bonds, cumulative noncumulative. I saw a lot of those last time

    May 28, 2017 at 11:09 pm #1561765
    Jj
    Participant

    What's everyone's gameplan tomorrow

    May 28, 2017 at 11:13 pm #1561767
    mtaylo24
    Participant

    Still cranking those MCQs in Gleim/Ninja, light review of old Gleim sim sessions, might flip through the Wiley focus notes I never used. I will probably take a long nap tomorrow afternoon, because I'm staying up until its time to head to the test center. I have to be there 7:30 am on Monday for my 8am test.

    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)

    May 28, 2017 at 11:13 pm #1561770
    CPAIN2K17
    Participant

    Going to finish copying ninja notes + ninja mcq + 2015 & 2016 AICPA released questions

    Tuesday will consist of ninja MCQ + going over any topics that I am still having trouble with

    I have kind of neglected studying sims but I don't really see the point

    May 28, 2017 at 11:14 pm #1561771
    CPAIN2K17
    Participant

    @mtaylo I hope you have to be there at 7:30 on Tuesday, not Monday lol

    May 28, 2017 at 11:15 pm #1561773
    mtaylo24
    Participant

    LOL whoops…it all has been one big long day! I keep thinking that tomorrow is Sunday

    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)

    May 28, 2017 at 11:16 pm #1561776
    CPAIN2K17
    Participant

    Oh and I need to do the Wiley practice exams at some point. Oops, kinda forgot about those.

    May 28, 2017 at 11:18 pm #1561777
    Jj
    Participant

    @mtaylo you're doing an all nighter? Bold.

    May 28, 2017 at 11:19 pm #1561779
    mtaylo24
    Participant

    @Beantown23 I did it twice in six days last window lol. 8am BEC on Sat then 8am FAR on Fri. No sleep for either haha

    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)

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