FAR Study Group January/February 2013 - Page 72

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  • February 17, 2013 at 5:44 pm #400354
    MCLKT
    Participant

    bwahahahaha!!!!

    Someone needs to contact the GASB, or start a petition. That Modified Accrual is soooo inappropriate! There's no way it should be legal!!!!!

    I'm going to switch my schedule today and do Gov't NFP just so I'm on the same material as you all 🙂 I had it down for tomorrow, so it's not a biggie.

    A:[73]97 F:[74]85 R:86 B:[74]82
    *NINJA 10 Pt. COMBO & Yaeger*

    February 17, 2013 at 8:29 pm #400355
    to_be_a_CPA
    Participant

    Hey FAR fam, just checking in. I have been reviewing for the last week and it seems I have forgotten a tremendous amount of material. My confidence is a bit low because of it but I am still plugging away at the MCQs. Hopefully everything will start coming together soon.

    AUD- 61,76-PASS!!!
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    February 17, 2013 at 9:04 pm #400356
    MCLKT
    Participant

    85% on Govt. today.

    It's very apparent to me, that the popular topics from last quarter have really stuck in my head. Bonds, Leases, Gov't, NFP, Pensions…. but the things a lot of people didn't talk about, I've completely forgotten.

    I don't want to slight the popular topics, but I think I should rely on what I already know and really focus on my weaknesses.

    I'm afraid AICPA will know how to hit me where it hurts. Ideally, I can master all of it by next Thurs.

    Time to stay ANGRY!!!!!!!!!

    https://i.minus.com/iMKl48dvaJtHC.gif

    A:[73]97 F:[74]85 R:86 B:[74]82
    *NINJA 10 Pt. COMBO & Yaeger*

    February 17, 2013 at 9:29 pm #400357
    Anonymous
    Inactive

    urgghh this gov & NFP are so Boring .. ..:D

    I am bored, time for a break 😀

    https://24.media.tumblr.com/61f87d782b947808211e2bbafc90042e/tumblr_mi11fjqQBZ1s3b1w1o1_500.gif

    February 17, 2013 at 10:15 pm #400358
    mindjet
    Member

    Hey guys,

    If anybody is done with stockholder' equity, I have a confusion… If the dividend is declared on Jan1-yr1 and some stock was bought back Jan 4 yr1 before the date of record/ payment. do we pay dividend on those shares?

    FAR 02/28/2013

    February 17, 2013 at 10:28 pm #400359
    Anonymous
    Inactive

    I know most of you are in your final review….but any advice/tips on trying to convert from cash basis to accrual basis and vice versa? Nothing is sticking and I'm really confused. Here is an example:

    Young & Jamison's modified cash-basis financial statements indicate cash paid for operating expenses of $150k, end of year prepaid expenses of $15k and accrued liabilities of $25k. At the beginning of the year, Young & Jamison had prepaid expenses of $10k while accrued liabilities were $5k. If cash paid for operating expenses is converted to accrual-basis operating expenses, what would be the amount of operating expenses?

    a) $165,000

    b) $175,000

    c) $125,000

    d) $135,000

    Answer: A

    February 17, 2013 at 10:36 pm #400360
    peetree
    Member

    @mindjet

    Think of it this way, were they shareholders on January 1?

    @williteverend

    The easiest way to deal with those cash basis to accrual basis questions is to make t-accounts for each account they are referencing. This particular one is easy because they give you starting and ending balances from your two main accounts. If prepaid went from 10k to 15k, you know 5k of that 150k was spent on prepaids so you would subtract 5k from the 150k.

    145k.

    Then, you know your accrued liabilities went up by 20k. In the a-cruel (hehehe) world, that increase in liabilities should be recognized as an expense, so you add 20k to your 145k to get to your 165k.

    If you have two t-accounts set up, you can just bridge the gap for each account to determine what you need to add and subtract. I hope that helps!

    FAR 02/21/13 - 95
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    February 17, 2013 at 10:40 pm #400361
    gobias
    Member

    Prepaid expenses went up 5k. That means they were included in operating expenses under the cash basis, but should not be included under the accrual basis (hence “prepaid”). So deduct that. Accrued liabilities went up by 20k. That means the expenses were incurred, but not paid. So you have to add that.

    150 – 5 + 20 = 165

    You just need to think about what the change in each account means under both methods.

    @mindjet, I would think so. The declaration applies to shares outstanding at the date of declaration.

    *Edit: peetree beat me to it.

    F - 86
    R - 90
    A - 97
    B - 91

    February 17, 2013 at 10:43 pm #400362
    peetree
    Member

    We're so ready for thursday @Gobias!

    What time are you up? I'm 13:00

    FAR 02/21/13 - 95
    REG 07/02/13 - 87
    AUD 08/02/13 - 94
    BEC 08/30/13 - 85
    Ethics Exam - 90

    Illinois candidate awaiting his license

    Used Becker Self Study | Ninja Audio | Becker Flash Cards | Ninja Notes | Wiley Test Bank

    February 17, 2013 at 10:44 pm #400363
    mindjet
    Member

    Thanx Peetree, I won't forget now!! 🙂

    FAR 02/28/2013

    February 17, 2013 at 10:44 pm #400364
    Anonymous
    Inactive

    Hmm….good old T-accounts. Let me try working it out, peetree. I might have more questions….who knows! Unfortunately there were a few MCQ I skipped/got wrong because nothing was making sense.

    February 17, 2013 at 10:47 pm #400365
    gobias
    Member

    Yup! I'm glad I postponed it though.

    I wanted an afternoon time, but 8am was the only slot left so I'll be rising early on Thursday.

    F - 86
    R - 90
    A - 97
    B - 91

    February 17, 2013 at 11:00 pm #400366
    peetree
    Member

    @Gobias woof good luck! I am not an efficient morning person myself. My brain functions in a bit of a cloud till around 9:30 so I was cautious about picking the early time. The 5:00 pm time is ridiculous! Would not do that to myself either.

    I'm in such a cloud some mornings that I will occasionally forget to even zip my fly up until I get out to my car. It is a problem!

    FAR 02/21/13 - 95
    REG 07/02/13 - 87
    AUD 08/02/13 - 94
    BEC 08/30/13 - 85
    Ethics Exam - 90

    Illinois candidate awaiting his license

    Used Becker Self Study | Ninja Audio | Becker Flash Cards | Ninja Notes | Wiley Test Bank

    February 17, 2013 at 11:43 pm #400367
    mjp44
    Member

    Gov't + NFP accounting is a very pivotal section of the exam. Combined they make up roughly 20-25% of the test questions. Compared to the other material it is rather easy. So if you can master these two parts, ALL you would need to do is squeak out another 50 (out of 75) on the rest of the test! Thats all a 67%! Hell you could probably guess on the rest of the questions and squeak out a 60.

    FAR- PASSED (11/13)
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    If it's important to you, you will find a way. If it isn't, you will find an excuse.

    February 17, 2013 at 11:43 pm #400368
    Anonymous
    Inactive

    To follow up with my question above, I'm definitely mixing up the treatment of each method (cash basis and accrual basis) and that's throwing the whole question off.

    If we are starting off with cash basis net income of $70k and cash of $30k was received for services to be rendered at a future date, the $70k net income already recognized this as revenue. What is the treatment under the accrual method? Deduct or add to cash basis net income?

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