[jeff]

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

[Anonymous]

No. We get 6 holidays a year (01/01, 12/25, 07/04, Thanksgiving, Memorial Day, and Labor Day). Boooooo!

[Anonymous]

No. We get 6 holidays a year (01/01, 12/25, 07/04, Thanksgiving, Memorial Day, and Labor Day). Boooooo!

[samdiegoCPA]

@Donica – for some reason, I really understand Bonds/Leases. Once I get into the swing of doing MCQ, it all comes together. I'll be going through them again though this weekend, so if I find any tricks, I'll let ya know.

@CPAMommy – it's weird because my company's clients are all Police & Fire Departments aka governmental units, and we didn't get off MLK Day which produced zero calls or emails all day from anyone. It was nice, but just weird we didn't have it off as well, I guess.

AUD: 84
REG: 84
BEC: 79
FAR: 83

[samdiegoCPA]

@Donica – for some reason, I really understand Bonds/Leases. Once I get into the swing of doing MCQ, it all comes together. I'll be going through them again though this weekend, so if I find any tricks, I'll let ya know.

@CPAMommy – it's weird because my company's clients are all Police & Fire Departments aka governmental units, and we didn't get off MLK Day which produced zero calls or emails all day from anyone. It was nice, but just weird we didn't have it off as well, I guess.

AUD: 84
REG: 84
BEC: 79
FAR: 83

[Anonymous]

Ok So Sam I have a question for you:

Free or Reduced Rent consideration: If the lessor gives 6 months free rent. The lessee's accounting is as follows:

Example: Lessor agrees to give 6 months free on a 60 months(5 years) lease.

5 years ( 60 month) @ $1000 $60,000

First 6 months are free (6,000)

Net Cost for five years 54,000

Total Month Rented /60 months

Monthly rental Expense $900

for the first six months the Lessee records

Rent Expense 900

Rent Payable 900

then for the next 54 months

Rent Expense $900

Rent Payable $100 <

---

Where did this $100 come from??

Cash / rent payable $1000 <

---

Why $1000??

Please help me connect the dots…..

[Anonymous]

Ok So Sam I have a question for you:

Free or Reduced Rent consideration: If the lessor gives 6 months free rent. The lessee's accounting is as follows:

Example: Lessor agrees to give 6 months free on a 60 months(5 years) lease.

5 years ( 60 month) @ $1000 $60,000

First 6 months are free (6,000)

Net Cost for five years 54,000

Total Month Rented /60 months

Monthly rental Expense $900

for the first six months the Lessee records

Rent Expense 900

Rent Payable 900

then for the next 54 months

Rent Expense $900

Rent Payable $100 <

---

Where did this $100 come from??

Cash / rent payable $1000 <

---

Why $1000??

Please help me connect the dots…..

[Anonymous]

Donica – That's accrual accounting. The first 6 months, you didn't pay anything but you still have to record that in the books. Notice that the first journal entry didn't credit cash but instead rent payable. In your second journal entry, that $100 is going from rent payable to cash to make it $1000 (900 + 100). So in the end you are paying $1000 for 54 months = 54000. I hope I was of help?

[Anonymous]

Donica – That's accrual accounting. The first 6 months, you didn't pay anything but you still have to record that in the books. Notice that the first journal entry didn't credit cash but instead rent payable. In your second journal entry, that $100 is going from rent payable to cash to make it $1000 (900 + 100). So in the end you are paying $1000 for 54 months = 54000. I hope I was of help?

[NYCaccountant]

Technically there is no such thing as free rent in accrual accounting. You amortize the savings over the entire lease, so every month will have the same rental expense.

In this case the rental expense will $900 per month (54,000/60=900)

Debit – Rent 900

Credit Deferred Rent Liability – 900 Do this for the first 6 months, and the balance will be 5,400.

Now for the last 54 months, do this:

Debit Rent 900

Credit Cash – 1,000

Debit Deferred Rent – 100

After 54 months, the balance in that liability account will be zero and your total expense over the 5 years will be 54,000 (900*60)

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[NYCaccountant]

Technically there is no such thing as free rent in accrual accounting. You amortize the savings over the entire lease, so every month will have the same rental expense.

In this case the rental expense will $900 per month (54,000/60=900)

Debit – Rent 900

Credit Deferred Rent Liability – 900 Do this for the first 6 months, and the balance will be 5,400.

Now for the last 54 months, do this:

Debit Rent 900

Credit Cash – 1,000

Debit Deferred Rent – 100

After 54 months, the balance in that liability account will be zero and your total expense over the 5 years will be 54,000 (900*60)

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[pia ach]

@Cracked and NYCaccountant, Thanks for clarifying it, i too had the same confusion.

@ DonicaCampbell thanks to you too ..was feeling lazy to write down the whole question , glad you did it 😉

Finally done!!! Experience-pending. Ethics- Pending.
Reg 78 / 73/82.
Aud 74/89.
BEC 72 /78.
FAR 74/ 73/ 82.

[pia ach]

@Cracked and NYCaccountant, Thanks for clarifying it, i too had the same confusion.

@ DonicaCampbell thanks to you too ..was feeling lazy to write down the whole question , glad you did it 😉

Finally done!!! Experience-pending. Ethics- Pending.
Reg 78 / 73/82.
Aud 74/89.
BEC 72 /78.
FAR 74/ 73/ 82.

[Zackrampage]

So just got out of my first day at a client as a new auditor whew. Gonna listen to audio on the way home then rewrite more notes. Can someone plz explain to me how to calculate impairment and goodwill under ifrs and gaap so lost with all steps 🙁

FAR - 62 , End of aug 2015
BEC - 67, 67
AUD - TBD
REG - TBD

[Zackrampage]

So just got out of my first day at a client as a new auditor whew. Gonna listen to audio on the way home then rewrite more notes. Can someone plz explain to me how to calculate impairment and goodwill under ifrs and gaap so lost with all steps 🙁

FAR - 62 , End of aug 2015
BEC - 67, 67
AUD - TBD
REG - TBD

[Anonymous]

Why is the lessee crediting CASH for $1000, when they are actually paying $900, right?!…. I should be ashamed of myself– this is Accounting 101 &102…… I have a Masters in Accounting. Clearly, I have not MASTERED Accounting.This is should be simple at this point….Am I really ready to be a CPA??

[Author]

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