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November 25, 2013 at 5:49 pm #182024

jeff
Keymaster

FAR Resources:

Free FAR Notes & Audio – https://www.another71.com/cpa-exam-study-plan

FAR 10 Point Combo: https://www.another71.com/products-page/ten-point-combo

FAR Score Release: https://www.another71.com/cpa-exam-scores-results-release

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

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February 15, 2014 at 9:51 am #527596

Mel
Participant

These bond questions are killing my vibe! I'm trying to get through 200 MCQs today but they keep having twists where i need to RTQ. The theory questions are easy but the calculation questions are what getting me. After I finish my MCQs for bonds I'm going to do all the Bond SIMS too.

February 15, 2014 at 9:59 am #527560

Anonymous
Inactive

Case Problem (Becker’s CPA-01216, F9-64)

A NFP voluntary health and welfare organization received a $500,000 permanent endowment. The donor stipulated that the income must be used for a mental health program. The endowment fund reported $60,000 net decrease in market value and $30,000 investment income. The organization spent $45,000 on the mental health program during the year. What amount of change in temporarily restricted net assets should the organization report?

a. $75,000 decrease

b. $15,000 decrease

c. $0

d. $425,000 increase

The correct answer is C, $0.

Can someone please help me complete or correct my JEs for these transactions?

DR Cash – Permanently Restricted >> $500,000

CR Contributed Revenue – Permanently Restricted >> $500,000

#To record receipt of $500,000 permanent endowment.

DR ?????????????????????????? >> $30,000

CR Contributed Revenue–Temporarily Restricted>>$30,000

#To record $30,000 investment income

DR Contributed Revenue – Temporarily Restricted >> $30,000

DR Operating Expense >>>>>>>>>>>>>>>>>>>>>>> $45,000

CR Cash/Unrestricted Net Asset >>>>>>>>>>>>>>>>>>> $75,000

Opps, I'm going nowhere. Where did the $60,000 investment loss in MV go then?

February 15, 2014 at 9:59 am #527598

Anonymous
Inactive

Case Problem (Becker’s CPA-01216, F9-64)

A NFP voluntary health and welfare organization received a $500,000 permanent endowment. The donor stipulated that the income must be used for a mental health program. The endowment fund reported $60,000 net decrease in market value and $30,000 investment income. The organization spent $45,000 on the mental health program during the year. What amount of change in temporarily restricted net assets should the organization report?

a. $75,000 decrease

b. $15,000 decrease

c. $0

d. $425,000 increase

The correct answer is C, $0.

Can someone please help me complete or correct my JEs for these transactions?

DR Cash – Permanently Restricted >> $500,000

CR Contributed Revenue – Permanently Restricted >> $500,000

#To record receipt of $500,000 permanent endowment.

DR ?????????????????????????? >> $30,000

CR Contributed Revenue–Temporarily Restricted>>$30,000

#To record $30,000 investment income

DR Contributed Revenue – Temporarily Restricted >> $30,000

DR Operating Expense >>>>>>>>>>>>>>>>>>>>>>> $45,000

CR Cash/Unrestricted Net Asset >>>>>>>>>>>>>>>>>>> $75,000

Opps, I'm going nowhere. Where did the $60,000 investment loss in MV go then?

February 15, 2014 at 11:08 am #527562

Mel
Participant

Can you post the explanation please? This is as far as i can get and its probably wrong:

DR Cash – Permanently Restricted >> $500,000

CR Contributed Revenue – Permanently Restricted >> $500,000

#To record receipt of $500,000 permanent endowment.

DR Cash–Temporarily Restricted >> $30,000

CR Contributed Revenue–Temporarily Restricted>>$30,000

#To record $30,000 investment income

DR Reclassification–satisfaction of restriction >> $30,000

CR Cash–Temporarily Restricted >> $30,000

#To record money spent and released for restricted purpose

DR Unrestricted net assets >> $30,000

CR Reclassification–satisfaction of restriction >> $30,000

DR Operating Expense >>>>>>>>>>>>>>>>>>>>>>> $45,000

CR Cash/Unrestricted Net Asset >>>>>>>>>>>>>>>>>>> $45,000

#To record $45,000 mental health expense

February 15, 2014 at 11:08 am #527600

Mel
Participant

Can you post the explanation please? This is as far as i can get and its probably wrong:

DR Cash – Permanently Restricted >> $500,000

CR Contributed Revenue – Permanently Restricted >> $500,000

#To record receipt of $500,000 permanent endowment.

DR Cash–Temporarily Restricted >> $30,000

CR Contributed Revenue–Temporarily Restricted>>$30,000

#To record $30,000 investment income

DR Reclassification–satisfaction of restriction >> $30,000

CR Cash–Temporarily Restricted >> $30,000

#To record money spent and released for restricted purpose

DR Unrestricted net assets >> $30,000

CR Reclassification–satisfaction of restriction >> $30,000

DR Operating Expense >>>>>>>>>>>>>>>>>>>>>>> $45,000

CR Cash/Unrestricted Net Asset >>>>>>>>>>>>>>>>>>> $45,000

#To record $45,000 mental health expense

February 15, 2014 at 11:46 am #527563

Anonymous
Inactive

Thanks Mel.

It is on Becker's F9-64, explanations as follows: The change in TRNAs is comprised of the increase in TRNAs related to investment earnings and the amounts released from temporary restrictions. Losses in excess of satisfaction of donor-restricted stipulations are treated as unrestricted as follows:

Temporarily Restricted:

Investment Income >>>> 30,000

Release Restriction >>> (30,000)

End of Year >>>>>>>>> -0-

The decline in FV of the assets of the endowment fund first reduces the TRNAs and then reduces UNAs.

Unrestricted:

Release Restriction >>>> 30,000

Expenses >>>>>>>>>> (45,000)

Subtotal >>>>>>>>>>> (15,000)

Losses >>>>>>>>>>>> (60,000)

Beginning of Year >>>> 0

End of Year >>>>>>>> (75,000)

With the JEs you presented, I think you need to debit TRNA to zero this out.

February 15, 2014 at 11:46 am #527602

Anonymous
Inactive

Thanks Mel.

It is on Becker's F9-64, explanations as follows: The change in TRNAs is comprised of the increase in TRNAs related to investment earnings and the amounts released from temporary restrictions. Losses in excess of satisfaction of donor-restricted stipulations are treated as unrestricted as follows:

Temporarily Restricted:

Investment Income >>>> 30,000

Release Restriction >>> (30,000)

End of Year >>>>>>>>> -0-

The decline in FV of the assets of the endowment fund first reduces the TRNAs and then reduces UNAs.

Unrestricted:

Release Restriction >>>> 30,000

Expenses >>>>>>>>>> (45,000)

Subtotal >>>>>>>>>>> (15,000)

Losses >>>>>>>>>>>> (60,000)

Beginning of Year >>>> 0

End of Year >>>>>>>> (75,000)

With the JEs you presented, I think you need to debit TRNA to zero this out.

February 15, 2014 at 11:55 am #527565

Anonymous
Inactive

Mel, at least we agree on PRNA of $500,000 and the expenses of $45,000, which are actually chicken JEs. LOL.

I really wish I could get these investment income and losses straight so I would be a little more confident with NFP JEs.

February 15, 2014 at 11:55 am #527604

Anonymous
Inactive

Mel, at least we agree on PRNA of $500,000 and the expenses of $45,000, which are actually chicken JEs. LOL.

I really wish I could get these investment income and losses straight so I would be a little more confident with NFP JEs.

February 15, 2014 at 12:31 pm #527567

Mel
Participant

Ok so based on that section i would change my last entry to the following, it makes sense but i'm not sure if its right:

DR Unrestricted net assets >> $30,000

CR Reclassification–satisfaction of restriction >> $30,000

DR ___________>>>>>>>$60,000

DR Operating Expense >>>>>>>>>>>>>>>>>>>>>>> $45,000

CR Cash/Unrestricted Net Asset >>>>>>>>>>>>>>>>>>> $105,000

#To record $45,000 mental health expense and the $60,000 loss

I just don't know what account the 60,000 debit for the loss should go to. In my mind it should go to the PRNA account but i'm not sure.

February 15, 2014 at 12:31 pm #527606

Mel
Participant

Ok so based on that section i would change my last entry to the following, it makes sense but i'm not sure if its right:

DR Unrestricted net assets >> $30,000

CR Reclassification–satisfaction of restriction >> $30,000

DR ___________>>>>>>>$60,000

DR Operating Expense >>>>>>>>>>>>>>>>>>>>>>> $45,000

CR Cash/Unrestricted Net Asset >>>>>>>>>>>>>>>>>>> $105,000

#To record $45,000 mental health expense and the $60,000 loss

I just don't know what account the 60,000 debit for the loss should go to. In my mind it should go to the PRNA account but i'm not sure.

February 15, 2014 at 3:40 pm #527569

lvr21
Member

So … I'm a day behind on my study plan.. and I woke up with an awful headache. .. I feel like I have been ran over by a semi… AHH! I've gotta study… I have to pass FAR…

{R: PASSED!! (I passed one!)}
{B: PASSED!! (Halfway there!)}
{F: PASSED!! (1 left!!!)}
{A: PASSED(I am done!!)}

February 15, 2014 at 3:40 pm #527608

lvr21
Member

So … I'm a day behind on my study plan.. and I woke up with an awful headache. .. I feel like I have been ran over by a semi… AHH! I've gotta study… I have to pass FAR…

{R: PASSED!! (I passed one!)}
{B: PASSED!! (Halfway there!)}
{F: PASSED!! (1 left!!!)}
{A: PASSED(I am done!!)}

February 15, 2014 at 4:04 pm #527571

TaRenee
Member

I've been up since 5am…. when I get through my tasks on today's agenda… I'm going to enjoy some sushi and a nice nap!!!

My bed doesn't stand a chance… it's war!!!!! lol

REG [75] 02.27.13(1)
AUD [82] 04.15.13(1)
BEC [79] 05.29.13(1)
FAR [62] 08.26.13(1) [76] 02.24.14(2) - God is able!!! 🙂

Licensed NC CPA

February 15, 2014 at 4:04 pm #527610

TaRenee
Member

I've been up since 5am…. when I get through my tasks on today's agenda… I'm going to enjoy some sushi and a nice nap!!!

My bed doesn't stand a chance… it's war!!!!! lol

REG [75] 02.27.13(1)
AUD [82] 04.15.13(1)
BEC [79] 05.29.13(1)
FAR [62] 08.26.13(1) [76] 02.24.14(2) - God is able!!! 🙂

Licensed NC CPA
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