[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

[IwannabeaCPA2017]

One thing is def read the instruction- today I realize all my SIMS said leave the cell BLANK if it didnt require anything. I didnt last time and just put in 0 for everyone I wasn't sure about. Prob why I got a 59 LOL it could have been a 68 or even 70 had I not. So yea, just read carefully before y'all start working.

For DRS- sometimes the question dont correlate to the documents as I had few that didnt even have any documents but you can see what the possible options/answers could be..If that makes sense??

[Wannafree]

U definitely did good in MCQ. Now in SIMs unless you raced against time like me you shouldn't be surprised to pass.the one you are referring I assume is MCQ for NFP .I know ASC 958 and GASB 34 cold.LOL any hope for me ? Did you get any NASA type question which AICPA give to test your nerve ( pretest ) like calculate cash flow for Govt under direct method but as per IFRS.LOL. I call that NASA Controller of accounts question for CPA and then there would a easy question as last testlet for teasing you when you don't have 2 minutes but it will ask JE for depreciation .LOL

[Wannafree]

@ So in DRS any doc was redundant , I mean doc is there but no corresponding question ? 7 options is too much man ,reading 7 option will kill easily 3 minutes and if 5 items are there then 15 minutes just for reading options and then 4 minutes for documents.Solution at least 10 minutes so 30 minutes for one DRS.that's scary ,scratching my head how to do it in 15 minutes.

[Anonymous]

Anyone feel overwhelmed by the Pension sections? Becker only has 30 or so MCQs and I feel like I could go through them 100 times and not truely understand this stuff….if I get a SIM on this section I am a goner.

[FutureCPAforThomas&Co]

Taking my first part of the CPA exam this Tuesday 😡

Anywho idk whos using beckers but for F1 Sim2 #6

the tax expense is confusing the crap outta me…

The question is…

for the income statement… when u have discontinued operations

i know you calculate the discontinued portion @ the end net of tax… but where does that tax expense go is just ignored?

heres an example.. say tax rate = .3 & discontinued operations has 200k on gain of disposal which includes profit for year from disposal..

I/s
…

income from continuing operations before 100k

Income tax expense 30k = 100k*.3 — is this right?

income from continuing operation 70k

Discontinued operations net of tax 140k = 200k*.7

net income 210k

is this right? beckers is telling me the tax expense part isnt calculated like that… so confused -.-

[Anonymous]

@FutureCPAforThomas&Co I just read that section of the simulation and what you're saying seems correct

[Wannafree]

FutureCPA ,What is your question ?

[FutureCPAforThomas&Co]

from the example i just gave is the tax expense calculated correctly?

also another question regarding capitalization of construction interest, i saw a few questions saying construction was uniformly spent through out the year. When they calculate avoidable interest, they divide the total spend through the construction period by 2 and then multiply by the construction loan interest. Im confused why they divide by 2..

[Anonymous]

Question regarding Common Stock –

When a company has 20,000 shares of stock authorized on 1/1 and 15,000 are issued on 2/1 – is the other 5,000 considered Treasury Stock even though we didnt repurchase it from the shareholder?

This question came up as I review the Stock rights. When a company gives stock rights, it would credit common stock when it's exercised, but is there ever a debit put there to establish the stock? Sorry if this is a stupid question but it will definitely help my understanding of stockholders equity!

[Jen-J]

FutureCPA – they're dividing by 2 to get the average spend. Example, X equals 60K. Spent evenly, that means you were paying interest on January's 5K spend for 12 months plus February's 5K spend for 11 months, etc. Mathematically, that's the same as paying interest for 12 months on 30K. 60/2 = 30.

CPA the third: No, it's not treasury stock. Stock doesn't exist until it's first issued. The authorization says they could issue it (and this way they don't have to go back to get another authorization until after they have issued 20K shares) but until they do it's just an authorization.

Common Stock has a natural credit balance (equity account). Crediting Common Stock establishes it, at the time of the exercise of the options.

Good luck to you both!

[mattypxam14]

Could someone please explain how to get the effective interest rate with bond issuance costs.

Issued 10% 1,000,000 bond due in five years, interest is due semi-annually. The market interest rate is 12% and the bond sold for $926,395. Bond issuance costs of $20,000 were incurred.

What is the effective interest rate, and how did you calculate it?

[scattershot]

effective interest rate = market rate

[mattypxam14]

@scattershot not with bond issuance costs

[Anonymous]

@matty the effective rate is the market rate. You use the amount calced to determine the amortization of a discount or premium.

[mattypxam14]

Becker has the effective interest rate at 12.58%. Is that a given number by them or is this calculated somehow?

[Author]

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