[jeff]

Free Study Planner, Notes, Audio, Flashcards: https://www.another71.com/cpa-exam-study-plan/

Free CPA Exam Survival Guide: https://www.another71.com/cpa-exam-survival-guide/

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

[Anonymous]

Reconciling net income to net cash provided by or used in operations involves adjusting for the effects of changes in current assets and current liabilities that relate directly to income statement items and for noncash items, such as depreciation and amortization. This reconciliation is required, either as a supplemental disclosure (if the operating section of the statement is prepared by the direct method) or as the primary presentation (if the statement is prepared by the indirect method).

Following are guidelines for the direction of the adjustment to net income for those items most frequently encountered in preparing this reconciliation.

Reconciling Item Adjustment to Net Income

Addition (+)/Deduction (­)

Current Asset:

Increase ­-

Decrease +

Current Liability:

Increase +

Decrease ­ –

Long-term Debt:

Amortization of discount +

Amortization of premium –

Depreciation and amortization

of long-lived assets +

[tomq04]

Checking in with all of you fine folks!

Aug 23 is the day that will live in infamy, among other things.

Baby #2 is 4 weeks old tomorrow and life is crazy as can be. I just finished my CPA excel test bank and moving on to ninja MCQ. planning on 2 hours/day minimum, and hoping for 4 on Saturdays. A little light, but it's all that can be afforded. I'll be taking a break between each set to read a section of ninja notes. I will also be able to sit down with my old gov/NFP professor on 2 separate Monday afternoons to go through questions and whatever isn't clicking. (Hoping for Aug 4 and 11, leaving 12 days to do some full reviews.

I'm going to kill this test or die trying, and push with all I have. I've made it a long fricken way and 3 weeks and 5 days isn't enough to slow me down.

CHOO CHOO TIME TO CHUG ALONG!

REG- (1) 76
FAR- (2) 64, (5)74, (7)83 (Over achiever!)
AUD- (3) 70, (4) 75
BEC- (6) 75

[Anonymous]

Congrats on the new baby, Tom! Build on your previous tests and kill the parts that you know while building more confidence in the weak areas. I like the idea of meeting with the old prof to chat about Gov/NFP. Maybe he/she will give you different insight than do the test prep books.

Good Luck!

DM

[ahugemistake]

jstay: In regards to WTB, don't fret the scores you get unless you have taken all the questions once. The way I look at it is that after you have read the becker book and watched the lectures, you are now ready to see what the questions look like, every question on WTB is going to expose you to how a question might be worded on the exam. I find that most of the time I know what the answer is but the wording of the question can be tricky. I don't worry about getting answers wrong on WTB. I have my exam next week and I will finish the TB by this week and then take a practice CPA exam. THAT will be my deciding factor as to how ready I feel. I am listening to Ninja Audio in my car every day, I plan on sitting down and writing down what Jeff is saying in addition to memorizing JEs.

I hope this will help you cultivate your plan. I had about 3 weeks of reviewing, and that is pretty ideal if you want to retain the information you are reviewing.

FAR - 78*
AUD - 66, 79
REG - 73, 76
BEC - 79

[ahugemistake]

Did anyone else feel like that governmental accounting section of the Wiley TB was not as thorough?

I am pretty comfortable with the Gov Accounting section thanks to CPAexcel, so going into the WTB I was pretty well prepared. But I feel that the questions didn't really explore the range of topics in Gov Accounting, anyone else feel that way?

FAR - 78*
AUD - 66, 79
REG - 73, 76
BEC - 79

[HopefulCPA0601]

@ahugemistake – YES! and I also felt that wiley didnt go over intercompany elim's or acquisitions well enough either (like the CAR IN BIG consolidating elim entry in becker)

BEC: 65 - 79* - 84 DONE
AUD: 65 - 76 DONE
REG: 63 - 77 DONE
FAR: 65 - 63 - 67 - 69 - 73 - 71 - 83 DONE

Becker Notes & Flashcards, Wiley Test Bank, Ninja MCQ

[Anonymous]

Right there with y'all. CPAExcel didn't go into that much depth in MCQs for them and while using Gleim MCQs as a supplementary I noticed it dug a good deal deeper.

Just cracked off a set of random MCQs from entire text of CPAExcel and yielded a 90%. Puts a smile on my face before hitting the hay.

Let's do this Q3 FAR kiddos!

[ahugemistake]

This is not a good feeling, I am still not done with all my MCQs, and I was really relying on WTB to get me through this thing. I have 400 questions to go in wiley and still don't get over 50% on any of the quizzes I do take, idk what kind of magic I am going make happen on exam day.

FAR - 78*
AUD - 66, 79
REG - 73, 76
BEC - 79

[Anonymous]

Could somebody please explain this? “Accordingly, the contribution in Year 1 will exceed pension expense in Year 1 (the plan will be overfunded)”. Why?

Effective January 1, Year 1, Flood Co. established a defined benefit pension plan with no retroactive benefits. The first of the required equal annual contributions was paid on December 31, Year 1. A 10% discount rate was used to calculate service cost, and a 10% rate of return was assumed for plan assets. All information on covered employees for Year 1 and Year 2 is the same. How should the service cost component of pension expense for Year 2 compare with Year 1, and should the Year 1 balance sheet report a pension asset or liability?

Service Cost……………….Pension Amount Reported on the

for Year 2……………………Year 1 Balance Sheet

Compared with Year 1

A. Greater than…………………Asset

Answer (A) is correct.

Service cost equals the actuarial present value of benefits attributed by the benefit formula to services rendered by employees during the period. Service cost is unaffected by the funded status of the plan. The minimum pension expense for Year 1 will be equal to the service cost. Any gain or loss arising in Year 1 will be amortized in the minimum pension expense in subsequent periods. No prior service cost is amortized because no retroactive benefits were granted at the inception of the plan. No interest cost is included because the PBO on 1/1/Year 1 was $0 (no benefits had been earned at that date). No expected return on plan assets is recognized because no plan assets existed during the period (the first contribution was on 12/31/Year 1). Because the information on the covered employees for both Year 1 and Year 2 is the same, the actual benefits to be paid attributable to each of these years also will be the same. Thus, service cost for Year 1 will be less than for Year 2 because the present value of the same future benefits will be based on a discount period that is 1 year longer. It is given that the company makes required equal annual contributions to the plan. Accordingly, the contribution in Year 1 will exceed pension expense in Year 1 (the plan will be overfunded). A pension asset should be reported in Year 1 on the balance sheet to recognize the funded status of the plan.

B. Greater than……………..Liability

C. Equal to……………………Asset

D. Equal to……………………Liability

[VR]

I came across this Becker question from F2 and I can't understand why an accountant should reverse 50K of prepaid expenses…???? Please explain it to me in simple way….Thanks…

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?

Explanation

Choice “c” is correct, $510,000.

Unadjusted accounts payable at 12/31/Year 1 $ 360,000

Reverse debit balance and record as a prepaid (asset) 50,000

Reverse unmailed checks 100,000

Adjusted accounts payable at 12/31/Year 1 $ 510,000

[Anonymous]

Bear Co. prepares its statement of cash flows using the indirect method. Bear sold equipment with a

carrying value of $500,000 for cash of $400,000. How should Bear report the transaction in the operating and investing activities sections of its statement of cash flows?

Operating activities Investing activities

A. $100,000 addition $400,000 cash inflow

to net income

B. $100,000 subtraction $400,000 cash inflow

from net income

C. $100,000 addition $500,000 cash inflow

to net income

D. $100,000 subtraction $500,000 cash inflow

from net income

The answer is A. Why would it be an addition of 100,000 to net income vs subtraction??

[jpowell31]

@ahugemistake – it's your first exam, don't worry. I'd recommend either delaying a couple of weeks if you think it would help or just going for it if you can't take it any other time this window. You have nothing to lose if you fail and you'll see what the exam is really like and how that might motivate you to study differently and hey, you may be surprised at what you remember!

@VR You are reversing the payable not the prepaid expense. This question is asking what the total accounts payable balance is. The $50k represents an advance payment, which is not a payable but a prepaid amount (which is actually an asset) therefore you must reverse this, taking it out of the total amount payable. Essentially you have already paid this amount, is not still to be paid (i.e. a payable). You would then record this amount as a prepaid asset (but that step is not actually needed for this question, they just want to show you why you would take it out).

[Anonymous]

CPA2014Dream

Because they had loss. If there was a gain, they'd subtract. I would probably answer D without thinking about it much. RTMFQ!!

[jpowell31]

@CPA2014Dream – that's what makes cashflow tricky; it's backward to how you would normally think. With the indirect method,

Cash flow from operating activities =

Net income

+noncash expenses/losses –> in your example you would ADD the loss of $100k on the sale of equipment

-noncash income/gains

+ increases (decreases) in operating liabilities/(assets)

– increases (decreases) in operating assets/(liabilities)

[ahugemistake]

@jpowell, I am very determined to take it this time, I will give it all I got these last few days and then sit for the exam and like you said I might be surprised at what I remember! Staying positive.

FAR - 78*
AUD - 66, 79
REG - 73, 76
BEC - 79

[Author]

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