[jeff]

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

[NYCaccountant]

Purchase order for 12 cars, so originally our entry was

Encumbrances Dr. 264,000

Fund balance reserved for encumbrances Cr. 264,000

We received 6 cars so we posted these:

Fund balance reserved for encumbrances Dr. 132,000

Encumbrances Cr. 132,000

Expenditures Dr. 132,000

Vouchers payable Cr. 132,000

This leaves 132,000 worth of encumbrances that we need to reverse out. Since the 132,000 of the fund balance is already reserved for encumbrances, we simply post this:

Assuming my initial opening budgetary entries were:

Estimated revenue Dr. 300,000

Appropriations Cr 150,000

Fund balance Cr. 150,000

I'll reverse these at year end:

Appropriations Dr. 150,000

Estimated Revenue Cr. 300,000

Fund Balance Dr. 150,000

Now actual income revenue and expenses were below: This is the reversal at year end.

Revenue Dr. 300,000

Expenses Cr. 150,000

Encumbrances Cr .132,000

unreserved fund balance Cr. 18,000

@ the end of the day Fund equity equals:

Reserved for encumbrances 132,000

Unreserved fund balance 18,000

Fund balance is 150,000 which is the difference between revenue and expenses.

I totally made this up lol, but it's the only way it makes sense in my head.

FYI I guess you could show fund balance of 150,000 (300,000 Revenue – 150,000 expenses) and then just reverse this out against the encumbrance:

Fund balance Dr 132,000

Encumbrances Cr. 132,000

Don't take me seriously, I hate governmental!

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

[NYCaccountant]

Purchase order for 12 cars, so originally our entry was

Encumbrances Dr. 264,000

Fund balance reserved for encumbrances Cr. 264,000

We received 6 cars so we posted these:

Fund balance reserved for encumbrances Dr. 132,000

Encumbrances Cr. 132,000

Expenditures Dr. 132,000

Vouchers payable Cr. 132,000

This leaves 132,000 worth of encumbrances that we need to reverse out. Since the 132,000 of the fund balance is already reserved for encumbrances, we simply post this:

Assuming my initial opening budgetary entries were:

Estimated revenue Dr. 300,000

Appropriations Cr 150,000

Fund balance Cr. 150,000

I'll reverse these at year end:

Appropriations Dr. 150,000

Estimated Revenue Cr. 300,000

Fund Balance Dr. 150,000

Now actual income revenue and expenses were below: This is the reversal at year end.

Revenue Dr. 300,000

Expenses Cr. 150,000

Encumbrances Cr .132,000

unreserved fund balance Cr. 18,000

@ the end of the day Fund equity equals:

Reserved for encumbrances 132,000

Unreserved fund balance 18,000

Fund balance is 150,000 which is the difference between revenue and expenses.

I totally made this up lol, but it's the only way it makes sense in my head.

FYI I guess you could show fund balance of 150,000 (300,000 Revenue – 150,000 expenses) and then just reverse this out against the encumbrance:

Fund balance Dr 132,000

Encumbrances Cr. 132,000

Don't take me seriously, I hate governmental!

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

[ZSRizvi]

LOL I like that statement at the end. “Here's the answer but…I made it up and I hate governmental so…don't take me seriously.” ahahaha

I just think this question is worded strangely. It doesn't provide enough information. Or perhaps there's a loose connection in the wiring of my brain. I guess they just want you to assume the balance amount and just get the journal entries right. It's also confusing to me because Becker words the entries differently.

I'm alright with governmental. I abhor Not-for-Profits.

So ready for this to be over (hopefully) next week.

BEC (July 2013)
FAR (OCT 2013)
REG (NOV 2013)
AUD (JAN 2014)

The CPA Exam is an opponent that not even the Fellowship of the Ring would want to come across.

I have a long...long...journey ahead of me.

[ZSRizvi]

LOL I like that statement at the end. “Here's the answer but…I made it up and I hate governmental so…don't take me seriously.” ahahaha

I just think this question is worded strangely. It doesn't provide enough information. Or perhaps there's a loose connection in the wiring of my brain. I guess they just want you to assume the balance amount and just get the journal entries right. It's also confusing to me because Becker words the entries differently.

I'm alright with governmental. I abhor Not-for-Profits.

So ready for this to be over (hopefully) next week.

BEC (July 2013)
FAR (OCT 2013)
REG (NOV 2013)
AUD (JAN 2014)

The CPA Exam is an opponent that not even the Fellowship of the Ring would want to come across.

I have a long...long...journey ahead of me.

[NYCaccountant]

LOL. It just makes sense to me because when you initially recored the encumbrance you increased the equity of the fund by reserving some it. The government made 150,000, which is closed to the fund equity . This would give you a total fund equity of 282,000 (132,000+150,000) which can't be right because the equity only increased to 150,000 during the period, so I just netted the encumbrance against the fund balance, and now my equity is correct at 150,000 but it's split out as 132,000 reserved and 18,000 unreserved. Somehow I think that's how they want it to be done lol.

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

[NYCaccountant]

LOL. It just makes sense to me because when you initially recored the encumbrance you increased the equity of the fund by reserving some it. The government made 150,000, which is closed to the fund equity . This would give you a total fund equity of 282,000 (132,000+150,000) which can't be right because the equity only increased to 150,000 during the period, so I just netted the encumbrance against the fund balance, and now my equity is correct at 150,000 but it's split out as 132,000 reserved and 18,000 unreserved. Somehow I think that's how they want it to be done lol.

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

[Anonymous]

I have to confess I had a meltdown last night over bonds. After 18 years in the financial industry, the first several of which I spent working for a BOND TRADER, Becker confused me to the point that I had to step away from the materials. Seriously. People in the INDUSTRY should review this stuff before they spew it out to all the poor unsuspecting CPA candidates.

Oh, and clue clue clue! “Retirement plans” don't get lumped together into one bucket Becker! There are VERY DISTINCT DIFFERENCES in defined benefit and defined contribution plans that make a difference in the way some of the questions get answered.

And don't even get me started on what they did with the '33 and '34 Act for REG. As a compliance officer in the financial industry it my JOB to enforce those (and other mandadates) ever day. Sometimes I couldn't even figure out what they were talking about.

ARGH.

(OK, rant over. Sorry!)

[Anonymous]

I have to confess I had a meltdown last night over bonds. After 18 years in the financial industry, the first several of which I spent working for a BOND TRADER, Becker confused me to the point that I had to step away from the materials. Seriously. People in the INDUSTRY should review this stuff before they spew it out to all the poor unsuspecting CPA candidates.

Oh, and clue clue clue! “Retirement plans” don't get lumped together into one bucket Becker! There are VERY DISTINCT DIFFERENCES in defined benefit and defined contribution plans that make a difference in the way some of the questions get answered.

And don't even get me started on what they did with the '33 and '34 Act for REG. As a compliance officer in the financial industry it my JOB to enforce those (and other mandadates) ever day. Sometimes I couldn't even figure out what they were talking about.

ARGH.

(OK, rant over. Sorry!)

[NYCaccountant]

Am I the only one who feels like they are not sure what they know anymore? lol

You can be answering questions and just start second guessing yourself and end up

having a meltdown lol. Please tell me the other exams are not as horrible as this one is to prepare for.

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

[NYCaccountant]

Am I the only one who feels like they are not sure what they know anymore? lol

You can be answering questions and just start second guessing yourself and end up

having a meltdown lol. Please tell me the other exams are not as horrible as this one is to prepare for.

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

[Anonymous]

@NYC, I am in full blown self-doubt meltdown mode too. Having taken the other three parts, I will say this one is really horrible. All in all, I may end up in the camp that REG was ultimately worse, but AUD and BEC were significantly better than this craziness.

[Anonymous]

@NYC, I am in full blown self-doubt meltdown mode too. Having taken the other three parts, I will say this one is really horrible. All in all, I may end up in the camp that REG was ultimately worse, but AUD and BEC were significantly better than this craziness.

[Anonymous]

@DJN you are on a roll, self doubt is part of the process.

I am struggling with getting through the Yaeger videos. Watching them has benefited me but it just takes me forever to study. With still 20hrs of video to watch and a week to go to my 2 week full blown review. I am behind in everyway. Someone help!!!

[Anonymous]

@DJN you are on a roll, self doubt is part of the process.

I am struggling with getting through the Yaeger videos. Watching them has benefited me but it just takes me forever to study. With still 20hrs of video to watch and a week to go to my 2 week full blown review. I am behind in everyway. Someone help!!!

[Anonymous]

@Eliabraham, thank you for your message. And believe me, if I could help you play “catch-up” I would!

Quick question on bond carrying value. Does it include accrued interest? So, e.g., an investor buys a $100,000 bond between interest dates with $5,000 accrued interest. Is his carrying value $100,000 or $105,000? This seems so basic…

Edit: One more thing: What about on the issuer's books? So if the bond is dated Jan 1 but not issued until April 1 would the carrying value be just $100,000 or $105,000 to include the accrued interest.

It would seem to me not, but I am not relying on my own judgement any more.

[Author]

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