[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]

Holy sh!t — it just clicked! I've been looking at bonds and discounts and premiums (oh my!) for days now and it JUST clicked!!!

I didn't realize I was talking out loud until the guy in the office next to me poked his head in and said, “are you saying something about interest?”

HA!

[Anonymous]

Anybody else struggling hard with pensions (F6, part 1 in Becker)??? I didn't have much trouble with F1-5 (a lot of content but nothing too difficult to pick up), but F6 is kicking my ass.

There's only like 23 MC questions on pensions in the passmaster software, is this bc they're supposed to take a long time? I've done about 15 questions and I'm averaging almost 3 mins per question and getting less than 50% correct. Idk what everybody else's stats usually are on their first round of MC questions, but I usually end up around 75% and ~1-1.5 minutes per question… I guess my understanding of pensions isn't as good as I thought.

[NYCaccountant]

@CpaSoonPlease Focus on what each concept means. It took me 2-3 days for pension accounting to make sense. Then it just clicked, and to be honest, it's not very difficult at all. They just use weird terms to describe things.

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

[Anonymous]

Question about deferred tax assets/liabilities, please help me out here somebody.

In what scenario would deferred tax expense (or deferred tax benefit) be different from the deferred tax liability (or deferred tax asset)… basically what is the difference between the deferred expense and the deferred liability. Aren't they both just the temporary differences between book and tax income multiplied by the applicable future tax rate?

And same goes for current tax expense & current tax payable. Is current tax expense just tax income times current tax rate, and then current tax payable is current expense, less any tax payments made during the year?

Any help is appreciated.

[NYCaccountant]

Deferred tax liabilities or assets are cumulative over time. Deferred tax expense or benefit is the current years tax asset or liability. For example, say in the first year, on your income statement you end up calculating a deferred tax expense of 1,000

Journal entry:

Provision for Income tax expense Dr. 1,000

Deferred tax liability Cr. 1,000

In the second year, you calculate a deferred tax expense of 2,000.

Provision for income tax expense Dr.2,000

Deferred tax liability Cr. 2,000

Assuming the tax liability from the first year did not reverse, you would have a deferred tax liability of 3,000

at year end.

Current tax expense would equal current taxes payable unless you prepaid some of the taxes. For example:

Provision for income tax – current portion Dr. 2,000

Tax Payable Cr. 2,000

Now if you prepaid some of this balance earlier in the year than your payable would obviously be less. Assume you had prepaid $1,000:

Tax payable Dr. 1,000

Prepaid tax Cr. 1,000

Now your liability for taxes is reduced.

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

[Anonymous]

Hey is anybody going through the final review for Becker and doing the MC questions? I was wondering if anybody had answers for them so I can make sure mine are right. Its kind of annoying they don't just give you the answers in the book.

[newuseracc]

Can someone please help me comprehend this F2 question:

View post on imgur.com

me not getting this question literally comes down to reading comprehension I assume, cause I understand cash basis to accrual and effect on net income but have no idea what this question is saying/asking…could any one re word it in a different way?

[ZJ122]

@newuseracc: I think the focus of this question is on the different recognition periods for accrual and cashing bases of accounting. Under the accrual basis of accounting, revenue would be recognized when the earnings process is virtually complete which, in this case, occurred in a previous period. Under the cash method of accounting, revenue is booked when cash is received (net decrease in A/R), so revenue (income) would be overstated in this period.

Vice versa for accrued expenses. Expenses would be recognized already in a previous period due to matching under the accrual basis but would only be recognized when cash is paid out under the cash basis. So in this case, income would be understated this period.

Hope this helps!

[Utopia]

For those who use wiley test book: Module 13 Sim4, why the carrying value in 1/1/200 is 237,630 instead of 239,630? did I miss something?

Thanks.

[NYCaccountant]

Can you send a screen shot?

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

[Utopia]

Assume that you are the CPA for Dawson corporation. On Jan1,2010, Catrina corporation sold to Dawson Corporation equipment that originally cost $330,000, with accumulated depreciation of$75,000 for a non-interest bearing note with face value of $300,000 due January1,2014. The fair market value of the equipment is not readily determinable but the market rate for a note of this type is 6%. Dawson depreciate equipment over a 5 year life with no residual value. The present value of the note is $239,630.

Prepare an amortization table and calculate the interest income and carrying value of the note for Catrina for the year 2010 and 2011. Indicate whether the note has a premium or discount by completing the correct columns in the schedule.

Thanks@NYCaccountant

[NYCaccountant]

300,000 discounted at 6 percent for 4 periods is 237,628.10. Present value of $1 due 4 years from now. Something is missing from the question.

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

[newuseracc]

@ZJ122 thank you!

[newuseracc]

Ok this problem is from F3 of becker: there is a 2nd image with further explanation(click “second image”):

https://imgur.com/FwD1tQh,o8DMviA#0

ok so I see on page 17 of F3 the heading “amortize asset FV difference(premium) over related asset life”; is that what they are doing with that “write-off extra value of inventory”??

I guess a better question to help me understand it is: if that inventory WASN'T all sold in year 1 would the answer still be the same???

[tphil]

Yes, that's what they're doing with the “write-off extra value of inventory.” It's essentially implying that COGS should have been higher for the company that they invested in (since the fair value of the inventory was higher than the costs carried on their books), so Sage is going to recognize its portion of the extra COGS. The answer would have been different if some inventory remained at year end. For example, if 50% of the inventory remained, the write off would have only been 2,000.

[Author]

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