[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

[NYCaccountant]

Am I moving at too slow of a pace? I usually take a couple of days to do each section because I do every multiple choice question I can find on the topic. My test is in October, I'm taking this up coming week off from studying (Vacation), and I am currently on page 525 in Wiley. The amount of material is just becoming so vast!

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

[silliepanda]

Decided it was best to skip AUD for now. I made an aggressive plan that I just couldn't deal with. By the time I am ready to take another section will be October so I figure this would be a good section to focus on. Waiting for my REG score JUST WANT IT ALREADY! Good luck everyone.

BEC - TOO MANY FAILS TO LIST! July 2015 I WILL GET IT!
AUD - AUG 2015- NEVER PASSED!
FAR - LOST CREDIT
REG - PASSED

[Mike1987]

NYCaccountant, I would say you are way ahead of the game. I started after I took REG last week of May and I just finished all of Becker. Taking too long could mean you have to work that much harder to remember what you learned in the beginning. I test at the end of Aug.

[NYCaccountant]

Thanks Mike. I started review last month, so I'm a month in. My goal is to finish the book by the end of August, then basically review for a month. The actual work is not hard, but it's just committing all the rules to memory. What's helping me is the fact that I'm doing questions over and over again until this stuff pretty much becomes second nature.

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

[Anonymous]

Hey guys. Does anyone know how to tell when you could credit a liability recourse obligation? or could you show me the journal entries that would go with this problem?

Scarbrough Corp. factored $600,000 of accounts receivable to Duff Corp. on October 1, year 2. Control was surrendered by Scarbrough. Duff accepted the receivables subject to recourse for nonpayment. Duff assessed a fee of 3% and retains a holdback equal to 5% of the accounts receivable. In addition, Duff charged 15% interest computed on a weighted-average time to maturity of the receivables of 54 days. The fair value of the recourse obligation is $9,000. Scarbrough will receive and record cash of

a) $529,685

b) $538,685

c) $547,685

d) $556,685

B is the answer. Would a liability account for the recourse be credited?

[NYCaccountant]

The receivables are “subject to recourse”, so you must credit the recourse liability account for the 9k.

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

[Anonymous]

thanks, NYCaccountant. do you know what the rest of the J/E would be? what would you debit then?

[NYCaccountant]

Cash – Dr. 538,685

Fee – Dr. 18,000

Due from factor Dr. 30,000

Interest Dr. 13,315

Accounts Receivable Cr. 600,000

loss on factoring Dr. 9,000

Recourse Liability Cr. 9,000

I think I totally screwed up with the name of the accounts but I believe this to be the correct entry.

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

[NYCaccountant]

Booking the loss before it actually happens is in line with the conservative approach. For example, contingent gains will never be booked if probable, just simply disclosed. Contingent losses will always be booked if probable.

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

[Anonymous]

Did anybody else have tough time getting through the first set of MC questions on F2 for becker?

[LT-P]

Does anyone have an easy way of remembering what goes where on the Statement if cash flows? Especially for governmental accounting?

- passed all 4 exams on my first try using Becker!

Ethics: TBD

[Anonymous]

Can someone explain the basis of this problem and why we assume July 1 as the average start date since repairs are being made evenly?

Dunne Co. sells equipment service contracts that cover a two-year period. The sales price of each contract is $600. Dunne's past experience is that, of the total dollars spent for repairs on service contracts, 40% is incurred evenly during the first contract year and 60% evenly during the second contract year. Dunne sold 1,000 contracts evenly throughout the current year. In its December 31 balance sheet, what amount should Dunne report as deferred service contract revenue?

a.

$300,000

b.

$480,000

c.

$540,000

d.

$360,000

Explanation

Choice “b” is correct. When service contracts are sold, the entire proceeds are reported as deferred revenue. Revenue is recognized, and deferral reduced as the service is performed. Since repairs are made evenly (July 1 is average date), only ½ of the 40% of repairs will be in the current year.

Current year deferral ($600 x 1,000) $ 600,000

Earned in the current year (600,000 x 40% x 1/2) (120,000)

Deferral 12-31 $ 480,000

[Anonymous]

Thanks, NYCaccountant! I got it but just 1 more question. The 9,000 loss has nothing to do with the 9,000 recourse obligation right? meaning…they are the same only by coincidence in this case or no?

[PC]

How are you guys studying for sims? This is my first exam and while MC I think I'll be ok with, sims are really worrying me. I keep hearing Becker isn't good with sims, so I haven't even gone through them once yet and my exam is next Tuesday.

[Anonymous]

@dsteele139 – July 1st is considered average date because it's easier than figuring it up for each day, then adding together, and the result is the same. Like, since they're done evenly, you could divide the total R&M by 365 to get the daily amount, and then say Jan 1 was there for 365 days, Jan 2 for 364 days, Jan 3 for 363 days, etc., but that's take forever. However, Jan 1's 365 days and Dec 31's 0 days average out to 182 or 183 days…which happens to be precisely what July 1st is. And…the average of Jan 2's 364 days and Dec 30's 1 day is the same. And each time you move closer to Jul 1, it works the same, all the way up to Jun 30 and Jul 2. So, if you figured up each day's amount of R&M and the weighted-average amount that corresponds to for the year, you'd find that your weighted-average R&M is the exact same as using Jul 1. Note that this only applies when the expense is incurred evenly throughout the year! Does that help the problem make more sense?

[Author]

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