[jeff]

FAR Resources:

Free FAR Notes & Audio – https://www.another71.com/cpa-exam-study-plan

FAR 10 Point Combo: https://www.another71.com/products-page/ten-point-combo

FAR Score Release: https://www.another71.com/cpa-exam-scores-results-release

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

[NYCaccountant]

@Kels417 I used Wiley for FAR and the questions in the test bank are harder than the actual exam questions. The sims on the actual exam are longer and harder though. They throw curveballs at you. The wiley book questions are harder than the exam and the testbook in my opinion. If you do well on the book questions then you should pass the exam.

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[NYCaccountant]

@Kels417 I used Wiley for FAR and the questions in the test bank are harder than the actual exam questions. The sims on the actual exam are longer and harder though. They throw curveballs at you. The wiley book questions are harder than the exam and the testbook in my opinion. If you do well on the book questions then you should pass the exam.

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[servant2]

@dante042104 (re: wiley p462 Q21)

I find Becker's explanation to ‘installment sales' related questions quite helpful, so I'm presenting here the steps to compute various components which I encountered being frequently asked in some of the practice questions, such as to find deferred (unearned) gp, recognized gp, revenue income, journal entries, etc.. Below illustration I'm referencing to Becker 2013 FAR page F2-33 & F2-34 ”Accounting For Installment Sales”). See if this helps.

You may find the answer (to find ‘Profit on sale' & ‘Interest revenue') to this particular question in Step 1 [Profit on sale] and JE(4) [Interest revenue] below.

***********START*******************************************************************************

Fomulas:

Gross Profit = Sale – Cost of goods sold

Gross profit percentage = Gross profit / Sales price

Earned gross profit = Cash collections x Gross profit percentage

Deferred gross profit = Installment receivable x Gross profit percentage

Step 1: Gross Profit Year 2009

Sale on installment $3,520,000

Cost of goods sold ($2,800,000)

Total gross profit $720,000

** note: always use the sales price, so as to find the GP% in Step 2.

Step 2: Gross Profit Percentage

Gross profit / Sale on installment ($720,000 / $3,520,000) = 20.45%

Step 3: Earned Gross Profit

Sale on installment $3,520,000

Ending installment A/R $2,920,000

Collections (cash) $600,000

Gross profit earned (Collections $600,000 x Gross profit% 20.45%) $122,727

Step 4: Deferred Gross Profit

Ending installment A/R $2,920,000 Gross profit % x 20.45% Deferred gross profit $597,273

JOURNAL ENTRIES (JE):

(1) JE to record the installment sale:

DR Installment sale A/R $3,520,000

CR COGS (inventory) $2,800,000

CR Deferred gross profit (contra receivable) $720,000 (note: see Step 1. Total gross profit)

(2) JE to record cash collection:

DR Cash $600,000

CR Installment sale A/R $600,000

(3) JE to record profit on collection:

DR Deferred gross profit (contra receivable) $122,727 (note: see Step 3. $600,000 x 20.45%)

CR Realized gross profit on installment sales $122,727

(4) JE to record interest revenue:

DR Cash $146,000

CR Interest Revenue $146,000

**note: ($3,520,000 – $600,000) x 10% x 1/2 [period covered: 1Jul2009 to 31Dec2009]

BALANCE SHEET PRESENTATION

Accounts receivable $2,920,000^

Less: Deferred gross profit ($597,273)^^

Balance $2,322,727

^ see Step 3. Remaining principal to be received by Howe in future periods.

^^ see JE (1) & (3) above. Net balance from the ‘Deferred gross profit' contra account.

********END***************************************************************************************

"A final victory is an accumulation of many short-term victories." - Martin Luther King Jr.

[servant2]

@dante042104 (re: wiley p462 Q21)

I find Becker's explanation to ‘installment sales' related questions quite helpful, so I'm presenting here the steps to compute various components which I encountered being frequently asked in some of the practice questions, such as to find deferred (unearned) gp, recognized gp, revenue income, journal entries, etc.. Below illustration I'm referencing to Becker 2013 FAR page F2-33 & F2-34 ”Accounting For Installment Sales”). See if this helps.

You may find the answer (to find ‘Profit on sale' & ‘Interest revenue') to this particular question in Step 1 [Profit on sale] and JE(4) [Interest revenue] below.

***********START*******************************************************************************

Fomulas:

Gross Profit = Sale – Cost of goods sold

Gross profit percentage = Gross profit / Sales price

Earned gross profit = Cash collections x Gross profit percentage

Deferred gross profit = Installment receivable x Gross profit percentage

Step 1: Gross Profit Year 2009

Sale on installment $3,520,000

Cost of goods sold ($2,800,000)

Total gross profit $720,000

** note: always use the sales price, so as to find the GP% in Step 2.

Step 2: Gross Profit Percentage

Gross profit / Sale on installment ($720,000 / $3,520,000) = 20.45%

Step 3: Earned Gross Profit

Sale on installment $3,520,000

Ending installment A/R $2,920,000

Collections (cash) $600,000

Gross profit earned (Collections $600,000 x Gross profit% 20.45%) $122,727

Step 4: Deferred Gross Profit

Ending installment A/R $2,920,000 Gross profit % x 20.45% Deferred gross profit $597,273

JOURNAL ENTRIES (JE):

(1) JE to record the installment sale:

DR Installment sale A/R $3,520,000

CR COGS (inventory) $2,800,000

CR Deferred gross profit (contra receivable) $720,000 (note: see Step 1. Total gross profit)

(2) JE to record cash collection:

DR Cash $600,000

CR Installment sale A/R $600,000

(3) JE to record profit on collection:

DR Deferred gross profit (contra receivable) $122,727 (note: see Step 3. $600,000 x 20.45%)

CR Realized gross profit on installment sales $122,727

(4) JE to record interest revenue:

DR Cash $146,000

CR Interest Revenue $146,000

**note: ($3,520,000 – $600,000) x 10% x 1/2 [period covered: 1Jul2009 to 31Dec2009]

BALANCE SHEET PRESENTATION

Accounts receivable $2,920,000^

Less: Deferred gross profit ($597,273)^^

Balance $2,322,727

^ see Step 3. Remaining principal to be received by Howe in future periods.

^^ see JE (1) & (3) above. Net balance from the ‘Deferred gross profit' contra account.

********END***************************************************************************************

"A final victory is an accumulation of many short-term victories." - Martin Luther King Jr.

[kels417]

@DJN – thanks! I may just have to do one Becker exam and one Wiley exam so I can see the questions and sims in different ways.

@NYCaccountant – thank you. I didn't do terrible on the WTB questions, but I didn't do fantastic either. Hoping to brush up on the sections I did poorly on in the next couple weeks, so I'm fully prepared on my exam day!

Illinois
Becker self study | Becker flashcards | Gleim | self written notes | WTB

AUD - 74, 75 Passed! (Expires 1/2/2014)
BEC - 78 Passed! (Expires 2/6/2014)
REG - 70, 70, 72, 74, 76 Passed!!
FAR - 72, 66, 69, 67

[kels417]

@DJN – thanks! I may just have to do one Becker exam and one Wiley exam so I can see the questions and sims in different ways.

@NYCaccountant – thank you. I didn't do terrible on the WTB questions, but I didn't do fantastic either. Hoping to brush up on the sections I did poorly on in the next couple weeks, so I'm fully prepared on my exam day!

Illinois
Becker self study | Becker flashcards | Gleim | self written notes | WTB

AUD - 74, 75 Passed! (Expires 1/2/2014)
BEC - 78 Passed! (Expires 2/6/2014)
REG - 70, 70, 72, 74, 76 Passed!!
FAR - 72, 66, 69, 67

[Amay]

@CPAhopeful, I just rescheduled my exam because it was 4 weeks from today and I had to do some serious reflection to realize it was not gonna happen! I am taking it in January as well and have a similar study plan. However, I am planning on taking it slow for two weeks leading up to the holidays so I gave myself enough time to review in January. Let's get it done before busy season!

BEC: 73, 81
AUD: 85
FAR: 71, 77
REG: 74, 75...finally DONE! 😀

*This is my 2nd attempt at the CPA exam. For all of you who have failed this exam many times, given up on it, or taken a break like me, remember that it is still possible to finish what you started...failure is the opportunity to begin again more intelligently 🙂

[Amay]

@CPAhopeful, I just rescheduled my exam because it was 4 weeks from today and I had to do some serious reflection to realize it was not gonna happen! I am taking it in January as well and have a similar study plan. However, I am planning on taking it slow for two weeks leading up to the holidays so I gave myself enough time to review in January. Let's get it done before busy season!

BEC: 73, 81
AUD: 85
FAR: 71, 77
REG: 74, 75...finally DONE! 😀

*This is my 2nd attempt at the CPA exam. For all of you who have failed this exam many times, given up on it, or taken a break like me, remember that it is still possible to finish what you started...failure is the opportunity to begin again more intelligently 🙂

[Jennifer241]

@ Amay NNNooooo!!! we were on track together!

I have 11/19 modules read + notes. I plan to finish it this week. Then that will give me almost 4 full weeks of doing intense MCQ's and simulations.

AUD - Jan 9,13 Pass
REG - Aug 30,13 Pass
BEC - Oct 26,13 Pass
FAR - Dec 4,13 Pass

Licensed CPA in the state of Oregon

[Jennifer241]

@ Amay NNNooooo!!! we were on track together!

I have 11/19 modules read + notes. I plan to finish it this week. Then that will give me almost 4 full weeks of doing intense MCQ's and simulations.

AUD - Jan 9,13 Pass
REG - Aug 30,13 Pass
BEC - Oct 26,13 Pass
FAR - Dec 4,13 Pass

Licensed CPA in the state of Oregon

[Kenada]

Same here Amay,

I don't think I can do the exam in 3 weeks time for FAR so I am rescheduling this for Jan 17th 2014. I need all the time I can get to really sink my teeth into the information and then get the 4 weeks of review time I will need for this exam. Plus I have Year end coming up which will have me do a lot of overtime at work.

Sorry Jennifer 🙁

FAR 05/27/14; 786/110 - Done !

[Kenada]

Same here Amay,

I don't think I can do the exam in 3 weeks time for FAR so I am rescheduling this for Jan 17th 2014. I need all the time I can get to really sink my teeth into the information and then get the 4 weeks of review time I will need for this exam. Plus I have Year end coming up which will have me do a lot of overtime at work.

Sorry Jennifer 🙁

FAR 05/27/14; 786/110 - Done !

[oblio]

Concept question on Not-for-Profit:

Bad debt expense is netted against operations like normal expense. right?

Contra-revenues are netted directly against accounts receivable? and they are: allowance for uncollectibles, negotiated 3rd party rates and employee discounts?

[oblio]

Concept question on Not-for-Profit:

Bad debt expense is netted against operations like normal expense. right?

Contra-revenues are netted directly against accounts receivable? and they are: allowance for uncollectibles, negotiated 3rd party rates and employee discounts?

[Anonymous]

Quick Question…

On the sims… If I am off in my answers by $1 for rounding, would that be viewed as a wrong answer?

Please let me know

[Author]

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