[jeff]

Welcome to the Q3 2017 CPA Exam Study Group for FAR. 🙂

Introduce yourselves and let your fellow NINJAs know when you plan to take your FAR exam.

The Five Steps (NINJA Framework): https://www.another71.com/pass-the-cpa-exam/

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

[DeterminedCPAer]

Hey @jwalk. I don't think I'm gonna buy any ninja MCQs. I just want to do the Becker ones and see what I got wrong and why. I want to learn the concept of it.

I don't plan to study SIMs really. I really never have for REG or AUD. I review them to see how to work theme. Plus so many people have said the actual SIMs are way harder than Beckers. I'm hedging/hoping knowing the concepts and trying to envision the JEs as I do these MCQs will help me on the SIMs.

Can someone tell me more about DRS. Are they math or JE oriented, or is it like a paragraph and you have to select the correct wording in different sentences using all of the documents they provide?

[Ransita]

@DeterminedCPAer Thank you!

[jwalk]

@vinti I am doing about 6-8 hours during the week for the past two weeks. Doing more difficult work (MCQ and lectures while taking notes) in the morning, and review type work in the last two hours of my afternoon/evening. I am not working at all this summer so this is my job basically.

So far today I have finished the MCQ and skills for F9M1-M5 about to eat lunch and finish up F9M6 to whatever my brain can handle and then review. I am projecting that by tomorrow midday I will be done with material so I can do SIMS on the weekend. Monday afternoon I will start review.

Approaching review: I really think I get more out of re-reading the material vs watching the lecture again. So for review, I will do that unless I am REALLY struggling (Rev Rec is the enemy for me so for that I will probably resource a youtube video or find someone who can explain it differently). I purchased NINJA notes so that will help in the review also.

What is your approach looking like right now? I generally overestimate what I actually am able to complete. 🙁

@DeterminedCPAer Okay good to know. They do a good job of explaining for the most part.

[yari_cookie]

Hi guys!! if someone from this lovely group can help me with this section from Wiley Review regarding A/R (Selling/ pledge) I will cry of joy… I am not getting it!! please see below:

The Tiger Company held the note for 30 days and decided to discount the note at Auburn National Bank. Auburn National Bank charges a 10% discount fee on the maturity value of the note (which includes the interest for the complete term of the note) for the two months it will hold the note. The proceeds to Tiger equal the maturity value less the fee.
Accrued interest for the 30 days the note was held by Tiger: $4,000(.08)(1/12) = $26.67
Cash Proceeds from the Discounting Transaction: Maturity Value of the Note:
$4,000 +($4,000)(.08)(3/12) = $4,080
Less Discount Fee: $4,080(.10)(2/12) = (68)
Equals Cash Proceeds $4,012
Interest expense (if transaction is a borrowing) or loss (if transaction is a sale):
Carrying Value of Note at Date of Discounting: $4,000 + $26.67 $4,026.67
Less Cash Proceeds ($4,012.00)
Equals Interest Expense or Loss $14.67
If the transaction is a sale (i.e., if all three criteria of ASC 860 are met), a loss of $14.67 will be recorded. If the transaction is a borrowing transaction, interest expense of $14.67 will be recorded.
Entries assuming a borrowing (all three criteria are not met):
Interest Receivable 26.67
Interest Revenue 26.67
Cash 4,012.00
Interest Expense 14.67
Liability on Note 4,000.00
Interest Receivable 26.67
Entries assuming a sale (all three criteria are met)
Interest Receivable 26.67
Interest Revenue 26.67
Cash 4,012.00
Loss on Sale 14.67
Note Receivable 4,000.00
Interest Receivable 26.67
For the sale transaction, if the note is discounted with recourse, Tiger has a contingent liability for the remaining two months of the note term. If the maker does not pay the note, then Tiger must. Tiger may report the liability in its footnotes or credit Notes Receivable Discounted rather than Notes Receivable in the journal entry immediately above, for $4,000. The Notes Receivable Discounted account is contra to Notes Receivable. This approach more prominently discloses the contingent liability.

[Lee2]

Hi everyone,

I have a question regarding the Par-Value Method for Treasury Stock Transactions. I am using Gleim to study and believe there is an error in the text. The text states “if the acquisition price is greater than the original issue price the difference is a reduction of retained earnings or a credit balance in paid-in capital from treasury stock transactions”.

I understand the entry with a reduction in RE would look like…
Debit) Treasury Stock
Debit) APIC – C/S
Debit)Retained Earnings (Difference)
Credit) Cash

However, I am extremely confused as to why or how you could do this same entry with a CREDIT to Paid-in Capital T/S in place of the reduction in retained earnings. Should the text say debit instead? Any clarity or explanation would be greatly appreciated!

[DeterminedCPAer]

@lee2, I believe it should say debit. You only DR retained earnings because there is no TS – APIC.

The Par Method takes into account the gain or loss if you buy back the shares above or below the issue price.

If you buy back below the issue price, the gain is a credit to TS – APIC after you DR TS at par and DR CS-APIC.

I.e Issued 10K shares at $1 par for $11. Repurchased 5K shares for $5.

DR: TS – Par (5K x $1 = $5K)
DR: CS – APIC (5K x $10 = $50K)
CR: TS – APIC “the gain” (plug but s/b 5K x $6 = $30K)
CR: Cash (5K x $5 = $25K)

If you buy back above issue price, the “loss” is debited to TS – APIC. If you don't have any TS – APIC, you debit directly to retained earnings. i.e repurchased at $21.

DR: TS – Par (5K x $1 = $5K)
DR: CS – APIC (5K x $10 = $50K)
DR: RE or TS – APIC “the loss” (plug but s/b 5K x $10 = $50K)
CR: Cash (5K x $21 = $105K)

[Lee2]

Thank you for confirming! I needed that!

[tskits75]

Reading the Beecker chapter on gain contingencies. The book states that unless remote, the Company MAY disclose the gain contingency but must not accrue for it. Their new Skills Practice had a sim-like problem that had a gain contingency that wasn't remote and Good Ole' Timmy Boy said that you should not disclose the gain contingency (the problem had it being a sales contract being finalized on a piece of land that increased in value 10 days after year-end) to me that is not remote. In the MCQ I got a question wrong because I selected do not disclose a gain contingency (it was not remote).

I am assuming that I should trust the book and the MCQ and just go with always disclosing a gain contingency (unless remote), and not Tim's Skills Practice problem.

Thought?

AUD - 92
BEC - 79
REG - August
FAR - TBD

[Vinti]

@DeterminedCPAer & @jwalk thanks for sharing your study plans.
@jwalk I started with F1 yesterday, this is the my 1st time with becker. So 1st i am watching video then taking some notes then completing with skills and MCQs. But this whole is taking so much time. But anyways everyone needs to go through this once. So far I did just M1-M3 lecture.

[karanvir06]

@CoachEmUp thanks

[andjela]

Hi ninjas,

I'm taking FAR in August for the 3rd time. Took it last summer and got a 71, then again in the fall and got a 74. That second score really crushed me as I was confident that I passed. I used Wiley last year and now I'm prepping with Ninja MCQs. If you took the new FAR exam recently (April-July 2017), please share your thoughts and tips. Many thanks!

[Pacman71]

@CoachEmUp

I am glad that you feel good, and certainly understand your struggle with some concepts over others. Considering you are planning on being done today, best of luck finishing out the material, and KNOW that you are going to kick some butt during your review. Since you are so on top of things, I have all the confidence in the world that you will continue to do well grinding out the last three weeks. I also appreciate your perspective on the NINJA MCQ, I wish I would've thought of that before I purchased them last month! Oh well, live and learn right?

You are also right about being concerned about the uncertainty of the future. Considering VERY few people feel prepared for the exam, the best thing to do (in my opinion) is to simply prepare the best you can, and know that you will never feel 100% prepared. You got this my friend!

[CoachEmUp]

@Pacman71 Thanks for the kind words and encouragement. I wish you all the best in the last few weeks! Don't worry about the Ninja MCQ purchase… let's just pass the exam the first time and we won't worry about it!

[DeterminedCPAer]

I'm starting to review F3 using Becker. Based on the number of MCQs, it has 339, it looks to be one of the bigger sections (along with F1, 262 MCQs). I initially planned on doing 2 days of review for F3 but now I am going to move to 3 days.

All the other chapters have MCQs in the range of 150 to 200 so I consider them medium sections so I think 2 days would be enough. I guess this can change as time goes on. It looks like F2 is the only section I would call “low” because it only has 121 MCQs.

[frankrsa]

Just got through all the lectures for FAR (using becker), and I have 2 weeks until I take the exam. I was wondering how detailed you guys think I need to go with regards to the ‘CAN CPAS RIDE or SIT' stuff. That governmental FS reconciliation stuff is another level…. the other governmental questions are manageable, but seriously, I feel like the reconciliation took it to another level.

[Author]

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