[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

[Sherif Saeed]

Hello

Can i know the difference in the modules of 2014 & 2017 ?

As i have the course videos of 2014 but i have the pdf of 2017.

[DeterminedCPAer]

@frankrsa

I think chapter 3 in Becker will all be important stuff.

Cash and cash equivalent
Trade receivable
Inventory (LIFO FIFO WA periodic perpetual)
PP&E
Nonmonetary transactions
Impairment (indefinite 1-step, and indefinite and PPE 2-step)

Then I think goodwill, cash flow, balance sheet and income statements, equity and acquisition method, bonds, pension, leases, stockholders equity, and then basic NPF and Gov.

I hope currency, hedging, derivatives and income tax aren't tested or only have very basic conceptual questions!

[MZ123]

@sweetie1

Thank so much for sharing your expierence.

I feel like everyone is saying the SIMS are much harder on the exam. I am not aware of a course that has an awesome SIM test bank but I whish there was one.

I did look at comments about exams from a few years ago and even then people were saying the SIMS were much harder on the real exam. Hopefully the new SIMS aren't all way harder than the old SIMs before the exam changed but who knows.

I hope you did well and good luck on the rest of your exams!

[Anthony]

If you want a good sim bank, I would get Gleim. Probably the best sim bank money can buy. Bought it a while ago and don't regret it. If you search around the forum a lot of people would agree with me.

[SONA]

Hey guys, I planning to take my FAR in 1st week of September after failing with 74 last year. I will be done with BEC on 24th july. Do you guys think it is doable? or shall I plan to take in 1st week of October(my NTS expires on 10th October)?

Please give me some suggestions. I have Roger CPA review, and Becker expiring July 28th. Shall I renew Becker review? Lots of questions…….. Hopefully someone would guide me.

All the best who have exam coming up. I wish you the best.

[Wannafree]

Thank you @coachemUp,that's interesting question .Cost of merchandise lower as it is recorded at par hence RE is not correct.
Interest accrued @Stated interest rate is correct.
Let me know the correct explanation.Which review has this question ? curious.Very interesting question.
Any other tough question on lease and Bond ?

[CoachEmUp]

You guys are right. @determinedcpaer nailed the answer on the head. I got hung up in the language of the question and didn't quite understand exactly what was going on, I said RE & Int. Payable was correct and here's the explanation:

This answer is incorrect. Since cost of goods sold was understated in year 1, not enough cost was deducted from sales, resulting in an overstatement of income and retained earnings. However, the interest expense for 3 months would also be misstated because it was calculated as 16% of the face value of the note rather than as 11% of the present value of the note. On February 1 when the note is paid these two effects will have offset each other. However, on December 31, year 1, retained earnings would be misstated. Interest payable was properly accrued at the 16% stated (cash) rate for the 3 months from the date the note was issued until year-end, resulting in the correct reporting of interest payable.

This is from Wiley.

[Wannafree]

@coachemup , I don't get present value of the note part as it's paid in less than 1 year (ASC Topic 835).

[DeterminedCPAer]

@CoachEmUp

The answer to the question is worded very confusing… well to me (LOL). I went at the question thinking of it like a bond.

Also, I think Becker had a question similar but wasn't about merchandise. The question asked what amount would you book the machine you're buying. The question was similar because it had a down payment plus 5 annual payments of a certain dollar. The answer wanted you to add the down payment plus the present value of the 5 annual payments (plus shipping etc…). I dont know why the same wouldn't be done here.

For example: assume $5K down payment plus 5 annual payments of $10K. Assume present value of the 5 annual payments equals $38K. The entry to record this purchase would be:

DR: $43K – inventory or PPE etc…
DR: $12K – discount on note payable
CR: $50K – note payable
CR: $5K – cash down payment

[DeterminedCPAer]

@wannafree, I think when they say present value of note, I think they mean par value of the note.

[Wannafree]

@DeterminedCPAer ,got it .

[CoachEmUp]

Can anyone post a couple of good DB pension questions? Wiley seems to have a million questions overall, but for some reason they only have a couple of calculation questions for this topic.

I've gone from struggling with this topic when first studying it to somewhat understanding it now. I just want to master it before the test! Thank you

[CR7CPA]

I have a quick question. As I remember from the Financial Accounting exam, Startup costs are expense as incur, but what about if the startup costs is for fix assets, do you still expense it as incurred?

[DeterminedCPAer]

@CR7CPA

From my understanding, if the start up costs are to get the fixed asset ready to be used, they would be capitalized. It would be similar to shipping or installation.

Do you have an example of start up costs?

And does anyone agree or disagree with my thought process?

[CR7CPA]

DeterminedCPAer, what about if part of the startup costs are fixed assets? Do you still expense it as start-up cost and disregard depreciation?

[Author]

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