[tmturner74]

Is it ok to start a FAR Study Group? I retook Audit yesterday and although I don’t have a gut feeling either way if I passed or not, I am going to start on FAR. I am using Becker self-study and purchased the Ninja Notes for FAR.

I am looking forward to reading a/b everyone’s progression. Good Luck!

 

Aud- 11/28/12 (72), 02/27/13 (72), 04/06/2013 77!!
FAR-tbd
BEC-tbd
REG-tbd

[Anonymous]

Rise and Shine. Time to finish the F10 MCQ's for round 2.. Than on to looking at problem areas and Final Exams. Can't believe my exam is a week and a half away… and scores for wave 1 are FINALLY released next Friday. I feel like I've been waiting an eternity for my Reg score.

[Anonymous]

Rise and Shine. Time to finish the F10 MCQ's for round 2.. Than on to looking at problem areas and Final Exams. Can't believe my exam is a week and a half away… and scores for wave 1 are FINALLY released next Friday. I feel like I've been waiting an eternity for my Reg score.

[Randomness]

So is this the study accountability thread? Because I could really use some accountability right about now. 😉

FAR - Studying [4/1/2013 - ???] Test [??/??/????]
AUD - [Who Knows]
REG - [Don't Panic]
BEC - [Can't think that far ahead]

[Randomness]

So is this the study accountability thread? Because I could really use some accountability right about now. 😉

FAR - Studying [4/1/2013 - ???] Test [??/??/????]
AUD - [Who Knows]
REG - [Don't Panic]
BEC - [Can't think that far ahead]

[Anonymous]

What is everyone's thoughts on rereading the textbook (Becker) after completing all the MCQ's (twice) and Lectures. Is there any benefit to this?

[Anonymous]

What is everyone's thoughts on rereading the textbook (Becker) after completing all the MCQ's (twice) and Lectures. Is there any benefit to this?

[MrsBing]

If someone can read this and let me know what you think, I'd really appreciate it.

On January 2, Smith purchased the net assets of Jones' Cleaning, a sole proprietorship, for $350,000, and commenced operations of Spiffy Cleaning, a sole proprietorship. The assets had a carrying amount of $375,000 and a market value of $360,000. In Spiffy's cash-basis financial statements for the year ended December 31, Spiffy reported revenues in excess of expenses of $60,000. Smith's drawings during the year were $20,000. In Spiffy's financial statements, what amount should be reported as Capital-Smith?

a. $400,000

b. $410,000

c. $390,000

d. $415,000

Why isn't the answer $400,000? Reading through Becker Chapter 10 (Partnerships), when forming a company, assets are valued at Fair Market Value and this is the amount that the Persons capital account would be. So I thought it would be $360,000 + 60,000 – 20,000 = $400,000.

Below is Becker's answer:

Explanation

Choice “c” is correct, $390,000 Capital-Smith at December 31.

Balance, January 2

$ 350,000

Revenues in excess of expenses

60,000

Drawings

(20,000)

Balance, December 31

$390,000

Becker, Wiley Test Bank, and Ninja 10 Point Combo!

FAR: 89
REG: 87
AUD: 92
BEC: 75
Ethics: 90

Licensed Arizona CPA

[MrsBing]

If someone can read this and let me know what you think, I'd really appreciate it.

On January 2, Smith purchased the net assets of Jones' Cleaning, a sole proprietorship, for $350,000, and commenced operations of Spiffy Cleaning, a sole proprietorship. The assets had a carrying amount of $375,000 and a market value of $360,000. In Spiffy's cash-basis financial statements for the year ended December 31, Spiffy reported revenues in excess of expenses of $60,000. Smith's drawings during the year were $20,000. In Spiffy's financial statements, what amount should be reported as Capital-Smith?

a. $400,000

b. $410,000

c. $390,000

d. $415,000

Why isn't the answer $400,000? Reading through Becker Chapter 10 (Partnerships), when forming a company, assets are valued at Fair Market Value and this is the amount that the Persons capital account would be. So I thought it would be $360,000 + 60,000 – 20,000 = $400,000.

Below is Becker's answer:

Explanation

Choice “c” is correct, $390,000 Capital-Smith at December 31.

Balance, January 2

$ 350,000

Revenues in excess of expenses

60,000

Drawings

(20,000)

Balance, December 31

$390,000

Becker, Wiley Test Bank, and Ninja 10 Point Combo!

FAR: 89
REG: 87
AUD: 92
BEC: 75
Ethics: 90

Licensed Arizona CPA

[RGlazier12]

Someone want to explain to me why this question in Becker is listed as being correct?

On January 2, Elbert's Delivery Company and Wanda's Exporters exchanged similar delivery trucks in an exchange that lacks commercial substance. Data relative to the trucks follow:

Elbert's truck

Original cost

$10,000

Accumulated depreciation as of January 2

8,000

Fair market value

3,000

Wanda's truck

Book value

$15,000

In the exchange, Elbert paid Wanda cash of $10,000. Elbert's Delivery Company should record the new truck at:

a.$13,000

b.$12,000

c.$8,000

d.$10,000

Explanation

Choice “a” is correct. The new truck is recorded at $13,000 on Elbert's books. In this case, the transaction is considered to be a monetary exchange, because the boot ($10,000) exceeds 25% of the total consideration ($10,000 plus $3,000 fair value of the old truck transferred to Wanda). Therefore, both parties to the exchange recognize all gains and losses on the transaction. The journal entry prepared by Elbert follows

The question asks for the Truck on Elberts books, which if I'm not mistaken, and Elbert is paying boot, then no gain on the trucks should be recognized. Why is this answer correct?

CPA Candidate - Becker In-Class Study

AUD - January 10th, 2013 - PASSED 95
REG - February 28th, 2013 - PASSED 81
BEC - April 11th, 2013 - PASSED 85
FAR - May 30th, 2013 - PASSED 85
ETHICS - May 2013 - PASSED 95

[RGlazier12]

Someone want to explain to me why this question in Becker is listed as being correct?

On January 2, Elbert's Delivery Company and Wanda's Exporters exchanged similar delivery trucks in an exchange that lacks commercial substance. Data relative to the trucks follow:

Elbert's truck

Original cost

$10,000

Accumulated depreciation as of January 2

8,000

Fair market value

3,000

Wanda's truck

Book value

$15,000

In the exchange, Elbert paid Wanda cash of $10,000. Elbert's Delivery Company should record the new truck at:

a.$13,000

b.$12,000

c.$8,000

d.$10,000

Explanation

Choice “a” is correct. The new truck is recorded at $13,000 on Elbert's books. In this case, the transaction is considered to be a monetary exchange, because the boot ($10,000) exceeds 25% of the total consideration ($10,000 plus $3,000 fair value of the old truck transferred to Wanda). Therefore, both parties to the exchange recognize all gains and losses on the transaction. The journal entry prepared by Elbert follows

The question asks for the Truck on Elberts books, which if I'm not mistaken, and Elbert is paying boot, then no gain on the trucks should be recognized. Why is this answer correct?

CPA Candidate - Becker In-Class Study

AUD - January 10th, 2013 - PASSED 95
REG - February 28th, 2013 - PASSED 81
BEC - April 11th, 2013 - PASSED 85
FAR - May 30th, 2013 - PASSED 85
ETHICS - May 2013 - PASSED 95

[Anonymous]

I can explain both questions. For MRS Bing- your assumption is correct, the assets are recorded at FMV, however there is one simple word in the question that promotes the use of the contribution amount. It states that “He purchased the net assets” which implies that there are also Liabilities and he would record his investment as 350,000 with subsequent income and drawings accounted for based on that amount.

As for RGlazier- The reason you record it at 13,000 is because the 10,000 paid is >25% of the total consideration which means that both parties will be accounted for as a monetary exchange and recognize gains and losses in full (which is explained in the explanation). The only time you would recognize a proportional gain is when you receive boot, yes, but when the boot received is greater than the 25% both parties treat it like a regular exchange, regardless of who paid/received.

[Anonymous]

I can explain both questions. For MRS Bing- your assumption is correct, the assets are recorded at FMV, however there is one simple word in the question that promotes the use of the contribution amount. It states that “He purchased the net assets” which implies that there are also Liabilities and he would record his investment as 350,000 with subsequent income and drawings accounted for based on that amount.

As for RGlazier- The reason you record it at 13,000 is because the 10,000 paid is >25% of the total consideration which means that both parties will be accounted for as a monetary exchange and recognize gains and losses in full (which is explained in the explanation). The only time you would recognize a proportional gain is when you receive boot, yes, but when the boot received is greater than the 25% both parties treat it like a regular exchange, regardless of who paid/received.

[Theo]

@bcjasper09 You're not serious about re-reading that text are you? As of today I have sat for three exams and have never read the text beyond following along with the becker lecturers. Then again everyone learns differently. I would advise you to pay read the IFRS vs US GAAP appendices if you haven't done so already.

On to some good news, took my exams today and I feel good. Don't get me wrong it has nothing to do with the exam itself just that I'm glad that it's over, hopefully for good!

Good luck everyone! Now who's in for a power night???? 🙂 not me….

Next week I start BEC.

AUD 01/17/2013 (92)
REG 02/28/2013 (85)
FAR 04/26/2013 (85)
BEC 05/30/2013 (88)

[Theo]

@bcjasper09 You're not serious about re-reading that text are you? As of today I have sat for three exams and have never read the text beyond following along with the becker lecturers. Then again everyone learns differently. I would advise you to pay read the IFRS vs US GAAP appendices if you haven't done so already.

On to some good news, took my exams today and I feel good. Don't get me wrong it has nothing to do with the exam itself just that I'm glad that it's over, hopefully for good!

Good luck everyone! Now who's in for a power night???? 🙂 not me….

Next week I start BEC.

AUD 01/17/2013 (92)
REG 02/28/2013 (85)
FAR 04/26/2013 (85)
BEC 05/30/2013 (88)

[MrsBing]

thanks bcjapser, I need to start reading these questions more carefully. I know the answers, but the wording of some of these questions are killing me. There were quite a few trick questions in the partnership section of Becker.

Becker, Wiley Test Bank, and Ninja 10 Point Combo!

FAR: 89
REG: 87
AUD: 92
BEC: 75
Ethics: 90

Licensed Arizona CPA

[Author]

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