[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

[Yahmon]

@lampy44 I think its because in an annuity due the first payment is not discounted because its paid upfront. At least thats how I understand it. Using that logic it would explain why you discount it for 7 periods.

FAR 8/20/15 - Passed 77
AUD 10/10/15 -
BEC TBD
REG TBD

[CPWAT]

Hey guys,

I need your help.

Question
On November 1, Year 5, Clay borrowed $4 million at 9%, evidenced by an unsecured note payable to United Bank. The note is payable in five equal annual principal installments of $800,000. The first principal and interest payment is due on November 1, Year 6. On Dec 31, year 5 the non-current liabilities portion of the balance sheet should have a the note payable to the bank of?
answer: $3,200,000 (hm since payment is not due until Year 6, so I supposed the 800k was considered as current and 3200k as non-current) ?

[Jen-J]

Lampy – the first payment was paid 12/30. They want to know about the balance on 12/31. If they had asked the value at 12/30, it would be an annuity due for 8 periods (or ordinary annuity for 7 periods, plus 1). Since they're asking about 12/31, after the first payment is made, it's essentially now an ordinary annuity for 7 periods left.

[Jen-J]

CPWAT – Not sure what you're asking – are you asking why the answer is what it is? Current liability is based on next 12 months. The next payment is due 10 months after that balance sheet date so it's current. 800K current, 3.2M non-current. (If I'm not understanding your question, please post again).

[ankur]

I started studying for FAR after failing it once. I'm using Becker to prepare for the new exam. I spent a week on chapter 1. I feel like I'm going to slow. Has anyone use the ninja method and passed? Please share your study plans and any advice.

[IwannabeaCPA2017]

I think its normal to take some time to adjust. I took a while to move pass some chapters. what matter is learning the concept. Take your time and understand the stuff.

[msquared17]

I think I had a breakthrough tonight…..Using Becker, on F3M3. I wrote notes a few days after listening to the lecture and underlining the text. The information started to make sense and I was actually understanding it. Still did horribly on the MCQ. Typically when I get answers wrong on the MCQ, I send it to One Note. I've never gone back to review them. Well tonight I went through each one for M3 that I saved in One Note and handwrote notes on how to answer the questions. Then I went back to the multiple choice questions and tried to answer them without referring to my notes. I did surprisingly well! I think I will try this approach for M4 before I get too excited. LOL

I've been struggling with taking notes and knowing what I really need to write down. I don't think I can go wrong with taking notes based on questions I get wrong.

On the flip side, I feel like this will take me forever. It took me 2.5 hours to get through 30 questions. Yikes!

[kay]

I've been studying this way also… And yes I feel like it takes forever to get through MCQs. It takes me on average an hour and a half for 25 questions. I am not using Becker but I'm attacking this section using the Ninja method customized to fit the way the prep course material I have suggests. I've been studying FAR for 4 weeks now and am making slow but steady progress, and when I go back and do a comprehensive review I'm retaining the information. I think writing things down is making a big difference for retention. I've read my book once and watched all the videos now I'm rereading the book and working MCQs and focusing in on topics that are more difficult for me, or have complex calculations like statement of cash flows, consolidations & equity methods and inventory valuations. Today was a tough study day, but slow progress is still progress.

[lampy44]

@msquared17 I completely hear you on taking notes and not getting back to them! I have pages of notes I haven't been able to get back to but when I review them and take time it takes me 2 hours to get through the MCQ. It's been very tricky balancing review while moving onto the new material. I know I'm not balancing the act well so any advice or things you pick up on that are helping please share!

[gguzman]

This is my second week, and I feel like I am moving way slower then I was with REG. With REG I started 2 weeks early, but with FAR I heard that it is better to give yourself only 7 to 8 weeks, so I started when Becker suggested. I feel like it was a bad idea, because now I feel behind. I won't even know if what I did for REG worked until next week.

My hardest struggle right now is staying motivated. I know what I need to do I just feel over it sometimes. Maybe I will print out a picture of the Fender America Special guitar I want, and write down the reasons I am doing this.

F1 was so discouraging, I put those sims off until today. I hope that I can maintain the same determination for studying that I had with REG. These posts are very motivating, and I am happy to be part of a community where we can do this together.

Thanks all! Let's do this!

[Jen-J]

I'm doing FAR on a 13 week plan (10 sections, 3 weeks for review). I wanted to give up in Module 1. Module 2 wasn't bad at all. I'm in Module 6 and going back to review a little old stuff each day too when my brain can't handle new information. It takes me way longer than their time estimates suggest. I spend several hours every weeknight and all day on the weekend. Now, I learned this stuff 10-15+ years ago, which might be part of the issue. I'm using Becker – I read a few pages in the annotated book and write those notes (plus others) in my paper book, then I watch that part of the lecture. (I will break the lecture up into smaller sections to keep my brain active.) Then I do the Skills Practice (and reviewing the answers), then multiple choice. I find taking my own notes doesn't really help me (writing them helps a little but reviewing them really doesn't.). I've been doing the simulations at the end of each section (I wasn't sure if that was part of Final Review or not, which I also bought). I'm not sure if I'll want to add Ninja MCQ or not, I guess it depends how I feel later. I do plan to review governmental accounting heavily, my school didn't have a separate class on it, I think we had 2 weeks in Advanced. I plan to take both of the Becker practice tests and the AICPA practice test.

Other than that, I guess we'll see how it goes. I won't get my score on FAR until 2 weeks before I'm due to take AUD, so either way I'll be taking that on time.

[fxbinbin]

can anyone please help on this question?

During the year, Bay Co. constructed machinery for its own use and for sale to customers. Bank loans financed these assets both during construction and after construction was complete. How much of the interest incurred should be reported as interest expense in the year-end income statement?

A.
 
Interest incurred for machinery for own use: all interest incurred; Interest incurred for machinery held for sale: all interest incurred

B.
 
Interest incurred for machinery for own use: all interest incurred; Interest incurred for machinery held for sale: interest incurred after completion

C.
 
Interest incurred for machinery for own use: interest incurred after completion; Interest incurred for machinery held for sale: interest incurred after completion

D.
 
Interest incurred for machinery for own use: interest incurred after completion; Interest incurred for machinery held for sale: all interest incurred

I chose C, correct answer is D.

here's the explanation: Once an asset is complete, and ready for use or sale, then any interest incurred after that is an interest expense, not capitalized.

[JJK94]

In its December 31, 20X8 balance sheet, Fleet Co. reported accounts receivable of $100,000 before allowance for uncollectible accounts of $10,000. Credit sales during 20X9 were $611,000, and collections from customers, excluding recoveries, totaled $591,000. During 20X9, accounts receivable of $45,000 were written off and $17,000 were recovered. Fleet estimated that $15,000 of the accounts receivable at December 31, 20X10, were uncollectible. In its December 31, 20X9 balance sheet, what amount should Fleet report as accounts receivable before allowance for uncollectible accounts?
(a)$58,000
(b)$67,000
(c)$75,000
(d)$82,000
The answer is 75000(100000+611000-591000-45000).I understood everything except not considering 17000 recoveries?please help me.Thanks in advance

[Jen-J]

JJK94 – recovering A/R involves a debit to A/R, credit to Allowance (to restore the account), and then a debit to cash, credit to A/R (to show the account being paid). So it's a net effect of zero to A/R.

[Yahmon]

@JJK94 this is a confusing question that I had the same question like you about. It says collections EXCLUDING recoveries so I interpreted that as being the $17K in recoveries was not collected. The only thing that made me know it wasn't part of the answer was because $92K was not an answer choice.

FAR 8/20/15 - Passed 77
AUD 10/10/15 -
BEC TBD
REG TBD

[Author]

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