[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

[Gimme_a_75]

@vinti, I can't discuss specifics but will say I'm glad I currently work for a non-profit and that I spent so much time on Government which is by far my weakest area.

[S6]

@iwannabecpa17 i feel you!! going through the material i had a good grasp of bonds, leases, and gov't but when i saw those questions this morning i froze lol. Thanks for the tips, yeah im going to sharpen the saw on those JE's. There is just so many! As of right now im going through “Missed Last Time” MCQ's in Ninja and then will def get around to those SIMS. Good luck to you im sure you'll crush it

[Vinti]

@grasshopper & @Gimme_a_75 thanks for replying.


@IwannabeaCPA2017 we are in same boat I have 5 days until exam and really freaking out on NFP/Govt topic. Govt. funds are really killing me , difficult to identify the funds and reconciliation is horrible. I am currently reviewing becker notes with MCQs & SIMS that I missed in the past. Please anybody suggest how to review GOVT. topic?

[kdcpa]

Someone, please explain this Adjusting Entry problem:

Aneen’s Video Mart sells one- and two-year mail order subscriptions for its video-of-the-month business. Subscriptions are collected in advance and credited to sales. An analysis of the recorded sales activity revealed the following:

2011 2012
Sales $420,000 $500,000
Less cancellations $ 20,000 $ 30,000
Net sales $400,000 $470,000

Subscriptions expirations:
2011 $120,000
2012 $155,000 $130,000
2013 $125,000 $200,000
2014 $140,000
$400,000 $470,000
In Aneen’s December 31, 2012 balance sheet, the balance for unearned subscription revenue should be

a. $495,000
b. $470,000
c. $465,000
d. $340,000

Answer:
(c) At 12/31/12, the liability account unearned subscription revenue should have a balance which reflects all unexpired subscriptions. Of the 2011 sales, $125,000 expires during 2013 and would still be a liability at 12/31/12. Of the 2012 sales, $340,000 ($200,000 + $140,000) expires during 2013 and 2014, and therefore is a liability at 12/31/12. Therefore, the total liability is $465,000 ($125,000 + $340,000). This amount would have to be removed from the sales account and recorded as a liability in a 12/31/12 adjusting entry.

I am not able to understand how do we figure out from 2011 sales, $125000 expires during 2013 and from 2012 sales, $340000 expires during 2013 and 2014? Please explain.

[Anonymous]

@kdcpa I'm not sure if this is the “right” way to do it, but I got my answer by adding the subscriptions that were set to expire after Dec 31, 2012 (future periods are 2013 and 2014). $125K+$200K+$140K=$465 of unearned revenue, due to the fact that these subscriptions are for future periods.

[QueenofCups]

@kdcpa

Net sales
2011: $400,000 2012: $470,000

Expiration
2011 sale 2012 sale
2011 $120,000
2012 $155,000 $130,000
(Total $405 to be adjusted from “Unearned(liability)” to “Revenue(Sales)” by the end of 2012)

2013 $125,000 $200,000
2014 $140,000
—————————
Total: $400,000 $470,000

Hope this helps

Then they came for the trade unionists, and I did not speak out -
because I was not a trade unionist; Then they came for the Jews,
and I did not speak out - because I was not a Jew; Then they came for me -
and there was no one left to speak out for me.

[mtaylo24]

@WannaFree I was able to get the Sept 8 hail mary seat. Have to drive 3 hrs though, someone stole my spot at my local center as I was hitting submit.

AUD - 1st - 60 (12/12), 61 (2/13), 61 (8/13), 78! (11/15)
REG - 55 (2/16) 69 (5/16) Retake(8/16)
BEC - 71(5/16) Retake (9/16)
FAR - (8/16)

[kdcpa]

Someone, please explain me the question of adjusting journal entry:

Aneen’s Video Mart sells one- and two-year mail order subscriptions for its video-of-the-month business. Subscriptions are collected in advance and credited to sales. An analysis of the recorded sales activity revealed the following:

2011 2012
Sales $420,000 $500,000
Less cancellations $ 20,000 $30,000
Net sales $400,000 $470,000

Subscriptions expirations:
2011 $120,000
2012 $155,000 $130,000
2013 $125,000 $200,000
2014 $140,000
$400,000 $470,000
In Aneen’s December 31, 2012 balance sheet, the balance for unearned subscription revenue should be

a. $495,000
b. $470,000
c. $465,000
d. $340,000

Answer:
(c) At 12/31/12, the liability account unearned subscription revenue should have a balance which reflects all unexpired subscriptions. Of the 2011 sales, $125,000 expires during 2013 and would still be a liability at 12/31/12. Of the 2012 sales, $340,000 ($200,000 + $140,000) expires during 2013 and 2014, and therefore is a liability at 12/31/12. Therefore, the total liability is $465,000 ($125,000 + $340,000). This amount would have to be removed from the sales account and recorded as a liability in a 12/31/12 adjusting entry.

[kdcpa]

@QueenofCups, I am confused why do we consider 2011 and 2012 sales as expired and not 2013 and 2014? Is it because the question provides us the sale from 2011 and 2012?

I was confused because of the wording. Now I understood that we are talking about subscription from sales of 2011 and 2012 which are going to be expired in 2011, 2012, 2013 and 2014. The 2013 and 2014 expirations would be deferred revenue.

Thank you for the reply.

[kdcpa]

@chasinCPA thanks for the reply. I got it.

[IwannabeaCPA2017]

is Ninja down for anyone else? My questions wouldn't load. 🙁

[Anonymous]

I was going through historical pass rates, and Q3 has the highest for FAR! Let's hope this trend continues. Good luck to all!

[SallyCPA]

@mtaylo I take it the day before you…how are you reviewing up until then?

[Ne’O]

Brutal week:
With hurricane to the left of me, and neighbor having lost his son to a hit n run by a DUI…. it wasn't the easiest of weeks.

I took the exam. I'd studied the hardest, longest, for this one.
It rocked me badly, rattled by an early question I knew I should nail but none of the answers matched my math.
Resurge… and I did. Only one of the first simms punched me seeing stars.

Time management is important. I'd been timing myself in practice, and still was rushed at the end.

Anyway, I *thought* my chances of being done were good.
I was going to grab a bottle of the champagne my wife and I had at our wedding 12+ years ago.
Instead, just picked up some food for the grieving neighbor family, came home, and put the best face on it I could.

The rains have been constant, but I've been in 2 flood zones in my life. The pumps are going full blast for 24 hours now, but still seeing flooding in our guest/rental house. The back yard is a total pool. So much for our garden this year.
Gambatte! Fighting!

I'll get this exam next quarter.
I would cut off a pinkie Yakuza style to be able to tell her I'd done it and was finally done. Maybe by Christmas then.

Newbie CPA Candidate

[lampy44]

Hey guys! I am also studying FAR right now and came across a questions I just cant understand. Any help would be greatly appreciated!!

A company with a June 30 fiscal year and entered into $3,000,000 construction project April 1 to be completed on September 30. The cumulative CIP balances : April 30, May 31 and June 30 were $500,000, $800,000 and $1,500,000. The interest rate on company debt used to finance as 5% April 1 through June 30 and 6%. From July through September 30. Assuming the asset is placed in service on October 1 what amount of interest should be capitalized on the project in June 30?

Anwer is $11,666

I understand that you must apply the interest rate of 5% to all the expenses but I dont understand the capitalization only on the accumulated construction. It says the $1.5 wasn't accumulated until June and the interests costs related to April and May are based on accumulated costs to those months.

[Author]

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