[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

[pia ach]

Jstay yes the answer is 37000.

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

[Anonymous]

Can anyone help me on the two questions I posted?

[Anonymous]

The way I understand it, foreign currency transaction is the gain or loss from the change in the exchange rate of a foreign currency when settling a transaction with an independent company. I/S

A foreign currency translation is converting (translating) ( that's how I remember it) the subsidiaries functional foreign currency into the currency of the Parent. Usually the dollar. OCI

[Anonymous]

I got this question in the WTB and am a little confused with the explanation.

Before year 2, Droit Co. used the cash basis of accounting. As of December 31, year 2, Droit changed to the accrual basis. Droit cannot determine the beginning balance of supplies inventory. What is the effect of Droit’s inability to determine beginning supplies inventory on its year 2 accrual basis net income and December 31, year 2 accrual-basis owners’ equity?

Year 2 Net Income Year 2 Owner's Equity

A, Yes Yes

B. Yes No

C. No Yes

D. No No

So the answer is C, and it stated:

This answer is correct. Inability to determine beginning supplies inventory would cause supplies expense to be understated and year 2 net income to be overstated. Cumulative supplies expense would be properly stated so there would be no effect on December 31, year 2 retained earnings.

How exactly is the answer not B then?

[FARtogo2014]

@CPAHopeful 2011—Yes you are correct on the depreciation expense.

AUD 81
REG 88
BEC 77
FAR 69 retake SCHEDULED TO TAKE IN Nov 2014

[Anonymous]

So what would the adjusting entry be? Isn't accounting estimates prospectively and you don't make adjustments to the prior year?

[Anonymous]

CPAHOPEFUL11,

If you're talking about the change from DDB to SL, all you do is take the net book value, divide it by years left, and make a normal entry.

If your asset has a five year life, 100,000 beginning value, no salvage, your DDB dep after 1 yr would be 40000, leaving 60000 NBV so your dep SL for the next four years would be 15000 per year.

[Anonymous]

Correct, but say if you changed the depreciation method from year two to three from DDB to straight line. Would you need to make an adjusting entry for year two?

[Anonymous]

@CPAHOPEFUL saw you ask in another thread for me to answer here – were you wanting help for the depreciation question or the change from cash to accrual question? If it's the inventory one, I'm not sure, cause it's been a year since I studied FAR and the details have escaped me. 😉 For the cash to accrual question, what do “yes” and “no” in the answers represent? AKA what question is being answered yes or no for each account? If it's “Is this account stated correctly?” then “C” makes sense, since income for the year can't be accurately determined (since we don't know how much beginning inventory was used), but ending owner's equity is correct because we have an accurate count of assets (inventory) at year end.

[Anonymous]

No, it's just in the year of change and forward.

[Anonymous]

Thanks Lilla, I was asking specifically about the depreciation question but I needed help on the other one as well. The answer was actually B which made no sense to me. So Owners Equity is affected but not Net Income? I mean the explanation would make you think they are talking about Net Income.

Also thanks to you Ancel. Yeah, that is where I was confused at not knowing if you would make an adjustment entry for the prior year on a question dealing with accounting estimates.

[CPA to be]

Any advice on reviewing the material? My exam ll be on 8/31. Feel so nervous right now. I plan to review 1 chapter per day but I took 2 days on F2 & F3. I plan to tackle & finish F4 today. I feel like crying every time after I finished redoing all MCQs within the chapter. I realize I don't remember a damn thing. Sorry for my language :(. I'm using Becker for my review. I haven't dare to do the progress test yet since I didn't score well on each section MCQs. Any tips would be greatly appreciated. Thanks.

[jstay]

i know you dont wanna but i would say deff do a mcq progress test. have you taken a practice exam?

[CPA to be]

Jstay, I haven't done practice exam yet. Do u think I should do that before redoing F4 MCQS? Another question, how to retain all the info & not getting things mix up?

[jstay]

its up to you. i did both of them already-one early august, the other this past saturday, and im taking 8/31 as well. how long have you been preparing for FAR?

[Author]

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