[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

[Anonymous]

Hi everyone! Anybody there who can shed light about available for sale securities? What I've learned is that when AVS is sold, normally you ignore the Unrealized Holding Gains and Losses(OCI) if the securities sold are not the only investment you have. Does this rule apply to sale of a portion of the only type of AVS you have? For example you have AVS worth $1,000 (this is the only AVS you have) and you sell $300 of those. Should we ignore the Unrealized Holding G/L here? Anyone pls. help I'm so confused. Thank you!

[NYCaccountant]

“What I've learned is that when AVS is sold, normally you ignore the Unrealized Holding Gains and Losses(OCI) if the securities sold are not the only investment you have” Where is that from? I don't remember ever reading anything like that.

Can you send me the link to that?

The thing I can remember about available for sale is that it requires a reclassification adjustment. So for example if I bought the securities in january for 1,000 and they are worth 1,500 december 31, then I book the 500 gain as a component of OCI. Now in the second year, I sale the securities for 2,000. Journal entry below:

Investment Dr.1,000

Cash Cr.1,000 Original entry

Investment Dr.500

Unrealized gain Cr. 500 To record gain

Cash Dr. 2,000 Balance sheet

Investment Cr 1,500 Balance sheet

Reclass Dr. 500 OCI

Gain on transaction Cr. 1,000 To record the sale and gain in net income. Income statement

Am I missing something though? Thats how I remember doing it.

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

[NYCaccountant]

“What I've learned is that when AVS is sold, normally you ignore the Unrealized Holding Gains and Losses(OCI) if the securities sold are not the only investment you have” Where is that from? I don't remember ever reading anything like that.

Can you send me the link to that?

The thing I can remember about available for sale is that it requires a reclassification adjustment. So for example if I bought the securities in january for 1,000 and they are worth 1,500 december 31, then I book the 500 gain as a component of OCI. Now in the second year, I sale the securities for 2,000. Journal entry below:

Investment Dr.1,000

Cash Cr.1,000 Original entry

Investment Dr.500

Unrealized gain Cr. 500 To record gain

Cash Dr. 2,000 Balance sheet

Investment Cr 1,500 Balance sheet

Reclass Dr. 500 OCI

Gain on transaction Cr. 1,000 To record the sale and gain in net income. Income statement

Am I missing something though? Thats how I remember doing it.

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

[Anonymous]

I have a general question on studying allocation that I was hoping I could get some input on. I am taking Far, which is my first exam, 4 weeks from Monday. I am 85% of the way through the Wiley course and plan on spending the last 3 weeks reviewing all modules and doing non stop MCQ's. I am scoring an average of 80% on my Wiley test bank practice sessions. I know the majority of the concepts pretty well, but am not as strong on some of the more involved concepts like non-monetary asset exchange with boot, some of the harder diluted EPS questions, etc. Should I spend time hammering down these harder topics or should I just make sure I know all the basic concepts inside and out? My fear, especially with this being my first section, is that all my questions are going to involve the 20% of information that I have been getting wrong during my practice sessions. Any input is appreciated.

[Anonymous]

I have a general question on studying allocation that I was hoping I could get some input on. I am taking Far, which is my first exam, 4 weeks from Monday. I am 85% of the way through the Wiley course and plan on spending the last 3 weeks reviewing all modules and doing non stop MCQ's. I am scoring an average of 80% on my Wiley test bank practice sessions. I know the majority of the concepts pretty well, but am not as strong on some of the more involved concepts like non-monetary asset exchange with boot, some of the harder diluted EPS questions, etc. Should I spend time hammering down these harder topics or should I just make sure I know all the basic concepts inside and out? My fear, especially with this being my first section, is that all my questions are going to involve the 20% of information that I have been getting wrong during my practice sessions. Any input is appreciated.

[Anonymous]

@adam8199 – You have enough time, I suggest you spend a few days before you begin the overall review process hammering out topics you don't have a great grasp on. Then go to the overall review, and in that process see if there are any other areas you need to drill a little deeper on. Murphy's Law is the last thing you need kicking in once you sit down in front of that Prometric computer!

[Anonymous]

@adam8199 – You have enough time, I suggest you spend a few days before you begin the overall review process hammering out topics you don't have a great grasp on. Then go to the overall review, and in that process see if there are any other areas you need to drill a little deeper on. Murphy's Law is the last thing you need kicking in once you sit down in front of that Prometric computer!

[Anonymous]

Can anyone explain this?

Lake County received the following proceeds that are legally restricted to expenditure for specified purposes:

Levies on affected property owners to install sidewalks 500,000

Gasoline taxes to finance road repairs 900,000

What amount should be in the special revenue fund?

A: 900,000

Why is the 500,000 not in it as well? Wiley book says this would be in an agency fund or debt service. I guess I'm just not understanding why. I thought if it's for a special purpose like installing sidewalks it would be in the special revenue fund.

This is module 21, question 97 for reference.

[Anonymous]

Can anyone explain this?

Lake County received the following proceeds that are legally restricted to expenditure for specified purposes:

Levies on affected property owners to install sidewalks 500,000

Gasoline taxes to finance road repairs 900,000

What amount should be in the special revenue fund?

A: 900,000

Why is the 500,000 not in it as well? Wiley book says this would be in an agency fund or debt service. I guess I'm just not understanding why. I thought if it's for a special purpose like installing sidewalks it would be in the special revenue fund.

This is module 21, question 97 for reference.

[Anonymous]

@Dante – it would be agency if the entity is just collecting the money and passing it along. And the special revenue fund is for things that are NOT for capital projects or debt service. So, if the money was deemed capital project or debt service it would be appropriately excluded from the special revenue fund balance.

[Anonymous]

@Dante – it would be agency if the entity is just collecting the money and passing it along. And the special revenue fund is for things that are NOT for capital projects or debt service. So, if the money was deemed capital project or debt service it would be appropriately excluded from the special revenue fund balance.

[Anonymous]

Thanks. Possibly a stupid question but how do I know that the entity is just collecting the money and passing it along in this case? I understand that is what an agency does but I read it as just a tax that they were collecting and then planning to install the sidewalks. How am I supposed to infer that they are passing it to someone else?

[Anonymous]

Thanks. Possibly a stupid question but how do I know that the entity is just collecting the money and passing it along in this case? I understand that is what an agency does but I read it as just a tax that they were collecting and then planning to install the sidewalks. How am I supposed to infer that they are passing it to someone else?

[Anonymous]

Sorry dante, im not there yet. but i just want to ask question that possibly you or other people in this forum can answer. I have trouble with the simulation for F2 becker. this is the question..

in year 2, the company decided to dispose of its book binding component and properly computed the impairment to its value at $100K. The company also determined that the component would lose 75K throughout the year 2 fiscal year and another 150K until the unit's planned disposal in year 3. the company accounted for the impairment, actual losses, and anticipated losses as a loss on disposal in year 2.

the answer was since the asset was disposed of before 12/31/year 3, there is no effect on the balance sheet. the estimated loss should be counted in year 3 instead of year 2. but the operating loss and the impairment loss were correct to be recorded in year 2.

My question is, does anyone of you know how to make the journal entry of the question and the correction? i dont see that becker explains how to make the JE for the operating loss and disposal loss in F2 chapter.

Thanks in advance for your help! 🙂

[Anonymous]

Sorry dante, im not there yet. but i just want to ask question that possibly you or other people in this forum can answer. I have trouble with the simulation for F2 becker. this is the question..

in year 2, the company decided to dispose of its book binding component and properly computed the impairment to its value at $100K. The company also determined that the component would lose 75K throughout the year 2 fiscal year and another 150K until the unit's planned disposal in year 3. the company accounted for the impairment, actual losses, and anticipated losses as a loss on disposal in year 2.

the answer was since the asset was disposed of before 12/31/year 3, there is no effect on the balance sheet. the estimated loss should be counted in year 3 instead of year 2. but the operating loss and the impairment loss were correct to be recorded in year 2.

My question is, does anyone of you know how to make the journal entry of the question and the correction? i dont see that becker explains how to make the JE for the operating loss and disposal loss in F2 chapter.

Thanks in advance for your help! 🙂

[Author]

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