[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

[HappyDayss]

For governmental accounting, you should know the 11 funds, the accounting for each fund, the differences among the statements, and i guess governmental funds vs enterprise fund on the government-wide financial statements.

Done ^_^

[Mel]

I wanted to get in some last minute MCQs but i can't focus!!!

[ZSRizvi]

I was doing the calculations for F1…and I got the answer right but for the wrong reason. If anyone else remembers the problem about “accounting method for demos” and how should the cumulative effect be treated:

At December 31, Year 2, Off-Line Co. changed its method of accounting for demo costs from writing off the costs over two years to expensing the costs immediately. Off-Line made the change in recognition of an increasing number of demos placed with customers that did not result in sales. Off-Line had deferred demo costs of $500,000 at December 31, Year 1, $300,000 of which were to be written off in Year 2 and the remainder in Year 3. Off-Line's income tax rate is 30%. In its Year 3 financial statements, what amount should Off-Line report as cumulative effect of change in accounting principle?

I put down $0 because I thought it would have been expensed immediately in Year 1 since it's a principle change and that would be handled retroactively. But the answer is this:

Choice “b” is correct ($0). A change in method of accounting for demo costs is a change in accounting principle inseparable from a change in estimate. When a change in accounting principle is considered inseparable from a change in estimate, the change is handled as a change in estimate – prospectively. No cumulative effect adjustment is made.

—

My question is…how will we be able to tell those problems where changes in principle are separate from changes in estimates? I'm a bit confused on that right now.

BEC (July 2013)
FAR (OCT 2013)
REG (NOV 2013)
AUD (JAN 2014)

The CPA Exam is an opponent that not even the Fellowship of the Ring would want to come across.

I have a long...long...journey ahead of me.

[Mel]

Good luck to everyone taking their tests to today!! We can beat this exam. Mine is at noon so i'm going to do a light review today and practice a few SIMS.

[Anonymous]

OK, so I was going back to troubled debt restructure lessons and I'm wondering why they are departing from GAAP and not using PV when they are computing the gain/loss?

[NYCaccountant]

Thanks @ HappyDayss. I'm taking the practice exams through Wiley, and I'm actually doing well. The book questions

seemed so much harder though….not sure what to go with.

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

[Nevergiveup2012]

Can somebody help me with F6 (PENSION) Becker SIM tab #2? I understand the general concept of Pension but there are two particular items that I can't seem to get my head around.

The question is to determine the pension expense for year 5. As per Becker's suggestion , pension expense = “SIR AGE”

“G/L = Gains and Losses – Using the corridor approach, the unrecognized loss ($220,000) does not exceed the 10% of FV of Plan Asset = 10% X 3,310,000 = 331,000). Since the unrecognized balance is less than this 10% corridor, there will be NO amortization.

My question is if it's not amortized and does not impact the pension expense, what would be the J/E to adjust the difference between the expected vs. actual return (or in this case, the unrecognized actuarial loss)?

Pension Expense = SIR AGE, but I don't notice any amortization for the “E” (Amortization of Existing Net Obligation/Asset). Although the existing Net obligation/Asset is not provided in the simulation question, we should still be able to calculate the amount. I am a little confused as to why the “E” is not included in the pension expense.

I am so sorry for my long post, but I am at loss right now and need little hope to move on 🙂

BEC - 86 (8/31/12)
AUD - 97 (11/18/12)
REG - 83 (5/12/13)
FAR - 91 (12/2/13)
Done!!!

[NYCaccountant]

Technically, the difference between the actual return and expected return on plan assets should be go to OCI and accumulated other comprehensive income as a unrealized gain or loss. This gain or loss should only be recognized in pension expense if it passes the corridor approach test. You should only use the expect return on your plan assets to reduce pension expense and not the actual return.

If you don't pass the corridor test, than the unrealized loss or gain sits in accumulated other comprehensive income and is not apart of pension expense yet.

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

[Ycp2013]

I just took FAR today and I am freaking out because i may have made a big mistake. I put “no journal entry required” where i had unused boxes in my journal entries. Does this make the entire thing wrong????? I felt like I had a pretty good handle on all the concepts and i feel so stupid for possibly screwing my chances of passing the exam.

Anyone who can shed some light on this…..

[Mike1987]

Hi everyone, how do I take the ethics exam? I see the course text/cd rom on the AICPA website but it does not mention anything about a test. Thanks!

[Anonymous]

Dante: sorry for the late posting. I had family emergencies this weekend. I hope this helps:

OCI: excess adjustment of Pension PBO and FV of plan assets at year-end. I think of it as the portions that will be amortized in the future, or what is “left over”.

OCI's total goes on to the Equity statement. It is presented net of tax (1-tax rate). OCI can also be presented in the income statement below net income, again net of tax. In one of the statements OCI is broken out into the components in one of the statements. And can be combined in one line as OCI in the other areas it is presented.

So, do you have any good tips for pension expense? I hope you had a good weekend!

[Anonymous]

Thanks for the help, Beach Girl. Sorry there was an emergency…hope all is well.

I found pension expense easy because you know there are 5 parts, 3 you will always have, and then the two optional amortizations. You have the service cost, interest cost, and then the expected return (which reduces it). Then all you have left are the amortizations of any gain/loss or PSC. I find the individual items not as tricky…but the big picture and how they all connect is what trips me up. Did you just take FAR? How did it go?

[Anonymous]

Dante: Things are as good as they can be. Family member will be in the hospital for 15 days, but it could have been a lot worse. They will get to come home. I have been in hospitals more than I care to be this summer. I had a major-ish surgery in early Aug, and still not the best yet,so I did not take the test yet. I knew that I would not have been able to sit, and not be in pain, and in pain I would not have been able to think to pass. So I rescheduled for Oct.

Thank you for the tip on the expense. That simplifies it for me. Sometimes I see the big picture, and the details are fuzzy. I build it up into a big calculation, and then get confused on adding and subtracting.

OCI is different as it can be displayed in multiple statements. As it has to be a part of equity, it is considered a balance sheet account. Even if the same total is broken out somewhere else. As it is only displayed in comprehensive income statements, to have better disclosure and not required it can be very confusing. I assume with questions that OCI goes to equity and the balance sheet, but not to the income statement unless it is said to. And always do net of tax, unless it says to ignore the tax.

[solodolo]

@Ycp2013 I did the exact same thing and I'm worried it nullifies everything I did to answer the SIMs. It scares me but we won't know until we receive our grades. If anyone knows anything regarding this matter, some kind of answer would be appreciated. Thank you

FAR - 08/27/13 CPAExcel 90 + Becker Final Review Notes
AUD - 10/11/13 CPAExcel 82
BEC - 12/05/13 CPAExcel 80
REG - 08/04/14 CPAExcel 84 + Becker Final Review Notes

[ZSRizvi]

Holy crap, I just started F2 on Becker and ARGH MY HEAD.

I have two questions. Could someone please help me on them?

Lyle, Inc. is preparing its financial statements for the year ended December 31, Year 1. Accounts payable amounted to $360,000 before any necessary year-end adjustment related to the following:

-At December 31, Year 1, Lyle has a $50,000 debit balance in its accounts payable to Ross, a supplier, resulting from a $50,000 advance payment for goods to be manufactured to Lyle's specifications.

-Checks in the amount of $100,000 were written to vendors and recorded on December 29, Year 1. The checks were mailed on January 5, Year 2.

What amount should Lyle report as accounts payable in its December 31, Year 1, balance sheet?

Answer:

$510,000 (all of them should be included in A/P)

My question is why does the $50,000 go into A/P? How does it hit that account? Wouldn't you debit “Prepaid Supplies” or a similar account and credit “Cash”? And then when you actually did receive the supplies, you would credit “Prepaid Supplies” and debit “Supplies Expense”? Or am I wrong about that?

–

Question number 2:

What accounts does the FIT/FICA withheld taxes hit? Is it a liability?

Problem number 2 on F2 shows “accrued payroll liability” without showing how it was calculated. Is that a plug?

BEC (July 2013)
FAR (OCT 2013)
REG (NOV 2013)
AUD (JAN 2014)

The CPA Exam is an opponent that not even the Fellowship of the Ring would want to come across.

I have a long...long...journey ahead of me.

[Author]

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