[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]

Knob Co. transferred real estate pursuant to a troubled debt restructuring to Mene Corp. in full liquidation of Knob’s liability to Mene.

Carrying amount of liability liquidated $150,000

Carrying amount of real estate transferred $100,000

Fair value of real estate transferred $90,000

What amount should Knob report as ordinary gain (loss) on transfer of real estate?

A. $50,000

B. $60,000

C. $0

D. ($10,000)

Answer is D. But what about the gain on the debt restructuring, is it considered “extraordinary'? My exam will be tomorrow and I'm doing a final pass on MCQ's and notes.

[Anonymous]

CPAby2015,

According to my study materials gain or loss on the debt restructuring isn't considered extraordinary unless it's unusual and infrequent. I would probably answer A.

[Anonymous]

@anjanja That's my answer too! Grrr….!!!

[ahugemistake]

@amor how long does it take to get through the final review for becker? I have wiley and my plan was just to do quesitons and sims and practice JEs until my exam, what extra help does becker offer?

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

[HopefulCPA0601]

@amor – yes 7th attempt ;( .. I have the becker final review so I am going to look over that, and by the end of the day i'll have completed all of 1,458 wiley questions 1,458 and all 61 wiley sims. I am definitely going to do both becker and wiley final exams and then I was thinkign of doign becker questions on my weaker areas and just reviewing my notes/question/aicpa questiosn until my eyes bleed and cpa material is coming out of my ears.

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

[HopefulCPA0601]

@amor – yes 7th attempt ;( .. I have the becker final review so I am going to look over that, and by the end of the day i'll have completed all of 1,458 wiley questions 1,458 and all 61 wiley sims. I am definitely going to do both becker and wiley final exams and then I was thinkign of doign becker questions on my weaker areas and just reviewing my notes/question/aicpa questiosn until my eyes bleed and cpa material is coming out of my ears.

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

[HopefulCPA0601]

sorry double post

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

[jstay]

@cpaby2015 & anjanja I think it is an ordinary loss because its the difference between the fv and the book value of asset so therefore 100-90 is the loss of 10. NOW, if they asked you the extraordinary gain or loss, i think it would be the 60,000 because its the difference between the liability being release and the FV of the asset.

hope i helped!

[D C]

@HopefulCPA …I think it your final review should depend on how you learn the best. Like you I have amassed a ton of notes that I wrote down/typed up for my first FAR attempt. I posted for some feedback on here on my strategy but no response. So I wanted to make sure you got a response. b/c I think you may be like me and feel uncomfortable/anxious until you have a solid study plan for your final review.

I had one month off after my first FAR exam. So I am going back thru all the HWs and SIMs in Becker for F1-F10. I hope to have that done by July 31st, leaving 2 weeks for Final Review.

I suggest compiling you notes into sections and review a few of them each day for a couple of hours and then knock out 200 MCQs per day from ALL sections. I think you should work enough problems to see the full spectrum of topics from FAR and you'll be ready to for the exam and be done with the CPA exams!

Just my opinion but I think it helps. I use Flashcards also which do help me, but everyone is different.

Good luck with your FR.

B - 80
A - 71, 67, 77
R - 71, 77
F - 72, 77
DONE!!
Becker Self-study all the way! Did use Ninja Notes & Audio for FAR.

[HopefulCPA0601]

@DC thank you for the response, I definitely really really appreciate it and will be continuing to do more and more multiple choice. thank you so much! good luck to you also, hopefully we will both be done with this exam in less than a month!! and the CPA all together!

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

[HopefulCPA0601]

One of the Wiley hints just said “extinguishment of debt is no longer an extraordinary item”. Is this true? I thought that as long as its material, unusual, and infrequent then its extraordinary. Someone please confirm.

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

[D C]

Only if the question explicitly states that its unusual and infrequent i.e. extraordinary. However, if there are no other facts to indicate this, then yes it is now considered as a part of income from continuing operations. This type of transactions happens regularly.

B - 80
A - 71, 67, 77
R - 71, 77
F - 72, 77
DONE!!
Becker Self-study all the way! Did use Ninja Notes & Audio for FAR.

[Anonymous]

In its cash flow statement for the current year, Ness Co. reported cash paid for interest of $70,000. Ness did not capitalize any interest during the current year. Decreases occurred in several balance sheet accounts as follows:

Accrued interest payable $17,000

Prepaid interest 23,000

In its income statement for the current year, what amount should Ness report as interest expense?

Cash basis interest expense $ 70,000

Add decrease in prepaid interest 23,000

Subtract decrease in interest payable (17,000)

Accrual basis interest expense $ 76,000 <== ANSWER

my question is: why are the subtracting the interest payable?

[HopefulCPA0601]

@cpastudent: when working on the cash flow statement, there is a rule of thumb to follow thats pretty easy for the indirect method:

Net Income

+ decrease in debit balance account, – increase in debit balance account

+ increase in credit balance account, – decrease in credit balance account

Because interest payable (normal credit balance) decreased, you subtract

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

[JimmyChoo]

The easiest way to remember why you subtract interest payable is by remembering this formula taken from the indirect method statement of cash flow.

Current Assets (inverse relationship)

Current Liabilities (Direct relationship) where:

Subtract increases in current assets

Add decreases in current assets

Add increases in current liabilities

Subtract decreases in current liabilities (interest payable)

Take you givens and just plug in each category in this case to solve for accrual basis

Add decrease in prepaid interest (Current asset) + 23,000

Subtract decrease in accrued interest payable (C/L) – 17,000

Apply it towards your given interest expense in cash flow + 70,000

Solve for your accrual basis (financial statement: income statement) = 76,000

Hope that helps!

AUD: 71,66
FAR: 52, 56, 69, 73(shoot me)
REG:
BEC:

[Author]

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