[jeff]

Welcome to the Q4 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

[lampy44]

Pensions.. anyone out there want to help me with SIR AGE from Becker… Pensions are kicking my butt right now. Trying to work through sims to pull it all together and if I get a pensions sim, 75 is looking out of reach.

Thanks

[Ana]

any particular questions on SIRAGE?

[latecpa]

Hello ALL! I'm grinding away on FAR using NINJA…slow but UNsteady, lol, but very determined.

I'm studying investments and on page 77 there is a 20×2 adjusting entry with net unrealized holding gain/loss-earnings debit of $380(a loss). Actual unrealized loss 20×2 was $170. The explanation uses $210 valuation allowance account debit from 20×1, which was was taken into 20×1 net income as net unrealized holding gain, to make the 380 balance.

The valuation allowance account 20×1 was 210 debit, 20×2 is credit of 170. How exactly do these two get together to make 380?? I know I'm missing SOMEthing, I can't determine what it is. Any help is appreciated…thanks

[Katie]

I just finished all of the for-profit sections of Becker, and they suggest mastering and reviewing all for-profit before moving onto not-for-profit and governmental. Any suggestions on whether or not to take that advice? My exam is 11/13, and I think I would prefer just to knock out the last 2 and a half sections in the next week so I can focus on reviewing EVERYTHING in the two weeks before my exam.

[Ana]

Don't listen to that. Finish the whole book and include it in your review. As you've seen it many time, govt and nap are heavily tested.

[Q]

Crying

[Lentilcounter]

@Ana or anyone who has Becker….

I'm stuck on F1_Simulation 2, 6th sub-simulation

I calculated everything but the income tax expense which I can't seem to figure out.

incoming from continuing operations = 1,263,795

income tax expense = 1,263,795*.30 tax rate = -379,138.5

Becker software disagrees with me. I tried posting this on the “legalized cheating” thread but I keep getting kicked out. I feel like “big brother” is monitoring my posts or something.

BEC = 72 (6/08/16)
FAR = ?
REG = ?
AUD = ?

[lampy44]

Simulation Becker F4 testlet 2 question 3:

Situation 2: Throughout the year, Peterson sold merchandise costing $30,000 to silver at a price of $50,000. SIlver sold 60% of the inventory by De­cem­ber 31. SIlver remitted payment to Peterson before year end.

Eliminating JE at De­cem­ber 31.

I initially had recorded for the original JE-

Peterson would record:
Cash 50,000
Inventory 30,000
Gain 20,000

SIlver:
Inventory 50,000
Cash 50,000

This doesn’t look correct based on the explanation of the answer.

Becker answer for elimination JE:

Sales 50,000 (okay here)
Inventory 8,000
COGS 42,000

Inventory: 40% of the goods sold by Peterson are still in ending inventory (ok) original cost of inventory on Peterson’s books was $12,000 (30,000 * 40%)

Reduction in inventory adjusts the $20,000 inventory on books of silver to correct amount of 12,000

I set up a T account and I’m on board still.

COGS= $42,000 entire amount of Petersons COGS eliminated. Could plug it but I dont understand why there isn’t an elimination for a gain on sale? What am I missing.

COGS 50,000 intercompany sales – 30,000 COGS = 20,000, so that another $12,000 needs to be eliminated to show COGS based on original cost to Peterson…

[Ana]

@lentil having the same problem posting on that other thread. tried 23124 times. anyway, wanted to mention to practice sims F2.2 AND F2.5, highly recommend it.

let me go look at that sim.

[Ana]

got an answer for you. you're mistakingly taking the 30% tax rate mentioned in the prompt and applying it to the continued operations per your calc above. instead what the question is saying is that you should apply the 30% tax rate to the discontinued segment.
“Regarding the adjustment required for the discontinued segment, assume a tax rate of 30 percent.”
So when you move the discontinued segment out of continued ops then you'll:
650,000 (gain on disposal of disc ops) x .30 (tax rate) = 195,000
orig tax of 518,000 – 195,000 = 323,000
make sense?

[Lentilcounter]

Thanks Ana. If I am understanding you correctly, this is how you arrived at the calculation below.

You have to adjust the discontinued segment net of tax from $650K to $455K. Then, you subtract this $195K in taxes from the original tax expense of $518K giving you the $323K.

I'm just not understanding why I am removing this $195K in taxes from the previously reported tax expense? How did they arrive at their $518K calculation? Were they already accounting for the $195K discontinued segment taxes in the $518K?

BEC = 72 (6/08/16)
FAR = ?
REG = ?
AUD = ?

[Ana]

you're removing the tax from continued ops since discontinued doesn't belong in that group. like the IDA mnuemonic, I is gross of tax and D & A are net shown separately. They were counting it in the 518.

[Jen-J]

T minus 2 weeks for me. 72 on the first Becker mock test. Still have a lot to review, obviously (just started review this week).

[Bianca]

Bach Co. adopted the dollar-value LIFO inventory method as of January 1, 20X0. A single inventory pool and an internally computed price index are used to compute Bach's LIFO inventory layers. Information about Bach's dollar value inventory follows:

                               Inventory:
                          at Base-   at Current-
Date                     Year Cost    Year Cost
———-               ———   ———–
01/01/X0                  $90,000      $90,000
20X0 layer                 20,000       30,000
20X1 layer                 40,000       80,000

The Answer is 2.00 which is computer by dividing current layer/base layer which is 80,000/40,000 but I don't understand why. Beckers formula for price index= current year ending inventory/base year ending inventory ( not the actual layer itself). If anyone can better explain this, it would be greatly appreciated! Thanks!

[Ana]

@lentil take a look at F1.Sim 5 box 2. It's a great example of how effect/ineffect cash flow hedge will be tested. That's one of the sims I marked to practice to coincide with the blueprint.

[Author]

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