[jeff]

Post by Another71.

Free Study Planner, Notes, Audio, Flashcards: https://www.another71.com/cpa-exam-study-plan/

Free CPA Exam Survival Guide: https://www.another71.com/cpa-exam-survival-guide/

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

[Anonymous]

@plotikkk85

That is what it marks as the correct answer, but it has me worried because part of the solution says:

The $151,400 amount is calculated as follows:

Net income $150,000

Increase in accounts receivable ($23,000 – $29,000) (6,000)

Increase in allowance for uncollectible accounts

($800 – $1,000) 200

Decrease in prepaid rent expense ($12,400 – $8,200) 4,200

Increase in accounts payable ($25,400 – $22,400) 3,000

---

Cash provided by operating activities $151,400

Where it is clearly a Decrease in A/P in the question.

[plotikkk85]

@dzyj……ohhhh! I think you are right. Now, looking at it again…

I see. There is an obvious decrease in AR and that's why we have to subtract it from NI.

NI 150,000

Increase in AR (net) -5800

Decrease in Prepaid rent +4200

Decrease in A/P -3000 – paying cash out

Total: 145,400

Sorry about confusion.

[excel monkey]

@dzyj

There have been a couple posts over the last 3-4 weeks regarding this question. The A/P balances are reversed in the question itself.

FAR - 91
AUD - 88
BEC - 86
REG - 79

[Anonymous]

@excel monkey

ahh, I've been missing out. I don't check here too often.

[Anonymous]

@ Whoever shared the method of conversion from cash to accrual using the J/E T account (sorry for not remembering who shared it)- Thank you! Thank you! Thank you!

I finally am able to use that method and get the correct answer on those questions.

Wanted to take a moment to thank everyone who is sharing and helping! You guys rock!

[JS867_5309]

Got my NTS this morning and found all Sat dates in April are already booked, as are all the dates for the 3rd week, which was when I wanted to schedule. *sigh* – I decided being 1 week off-schedule wouldn't kill me and booked May 2.

When I pass, I'll have 2-3 months to study for REG. Hoping there won't be a retake of FAR, but I'm trying to be realistic that this will be my first attempt at “the beast”. I have to admit a tiny part of me is relieved I just bought myself 2 more weeks to study.

I will pass, I will pass, I will pass. I will conquer this test before my honeymoon 🙂

That's my motivational quote LOL!

Exam:I'm done 🙂 🙂 🙂
REG - 71 (2/22/14); 67 (4/3/14); 74 (8/29/15); 83 (2/29/16)!!!
BEC - 72 (5/24/14); 85 (1/3/15)!!!!
AUD - 72 (8/23/14); 76 (10/15/14)!!!
FAR - 77 (5/26/15)!!!

Started in 2013 using Kaplan and failed REG, REG, BEC, AUD. Switched to NINJA suite in Sept 2014 and passed AUD...then BEC...then FAR!
REG took 2 tries but I finally got it in too!
I'm a hard convert - Using NINJA method with NINJA video/book/notes/MCQ

Education: Check
Experience: 3 months left! I hit 4 years on May 30 🙂

[Determined CPA]

On December 12, 20X1, Imp Co. entered into three forward exchange contracts, each to purchase 100,000 francs in 90 days. The relevant exchange rates are as follows:

Forward Rate

Spot Rate (for March 12, 20X2)

---

---

December 12, 20X1 $.88 $.90

December 31, 20X1 .98 .93

Imp entered into the second forward contract to hedge a commitment to purchase equipment being manufactured to Imp's specifications. At December 31, 20X1, what amount of net foreign currency transaction gain should Imp include in income from this forward contract?

Why isn't this answer 3000? 100,000 x (.90-.93)

A - 75
B - 78 God is good.
F - 77 Answered prayers.
R - 84! Done!!

Paperwork sent - waiting for license!!
Still on a cloud and in shock. Through God, all things will happen.

[JS867_5309]

I believe the answer is $5,000 [100,000 x (.88 – .93)]. You entered into a forward contract on 12/12, so you begin with that rate. Then the question wants you to basically say, “If I liquidated my contract now, what would the result be?” Since the spot rate at 12/31 is higher than what you contracted to pay, you received a gain. You're only looking at 1 of the 3 contracts, so you account for 100,000 francs.

What is the answer?

Exam:I'm done 🙂 🙂 🙂
REG - 71 (2/22/14); 67 (4/3/14); 74 (8/29/15); 83 (2/29/16)!!!
BEC - 72 (5/24/14); 85 (1/3/15)!!!!
AUD - 72 (8/23/14); 76 (10/15/14)!!!
FAR - 77 (5/26/15)!!!

Started in 2013 using Kaplan and failed REG, REG, BEC, AUD. Switched to NINJA suite in Sept 2014 and passed AUD...then BEC...then FAR!
REG took 2 tries but I finally got it in too!
I'm a hard convert - Using NINJA method with NINJA video/book/notes/MCQ

Education: Check
Experience: 3 months left! I hit 4 years on May 30 🙂

[Determined CPA]

The answer is 0

The “second” forward contract was entered into to hedge a purchase commitment, therefore (assuming that all other conditions are met) it qualifies as a hedge of a purchase commitment. In that case, the forward contract qualifies as a fair value hedge (rather than a cash flow hedge). Therefore, the change in fair value of the derivative (the forward contract) should be included in net income, as should the change in fair value of the hedged commitment. Accordingly, the $3,000 gain (100,000 francs × ($.90-$.93)) would be included in income from continuing operations. If the hedge associated with the derivative qualified as a cash flow hedge, the unrealized gain would be included in other comprehensive income rather than in net income. However, the increase in the fair value of the hedged item, the purchase commitment, should be a $3,000 loss. The unrealized gain of $3,000 associated with the derivative (the hedging instrument) and the $3,000 unrealized loss associated with the hedged instrument (the purchase commitment) should result in a net unrealized gain/loss of $0. Thus, the net unrealized gain/loss included in income from continuing operations is $0.

That was the ninja explanation but means nothing to me. lol

A - 75
B - 78 God is good.
F - 77 Answered prayers.
R - 84! Done!!

Paperwork sent - waiting for license!!
Still on a cloud and in shock. Through God, all things will happen.

[jbarwick]

Can anyone comment on my study plan? It has changed slightly and I don't want to ruin what was a good plan.

Current: Study 1 chapter a week starting on Sunday, if I finish early (notes + homework MCQs), 30 MCQ blocks of old and current items until the next Sunday.

Altered: Since I was off work a couple days I was able to jump forward and learn a new chapter in 3 days then I moved onto the next chapter without repetition of MCQ's. This will get me done quicker for final review (which I already have 2 weeks) to possibly 3-4 weeks before my test for Final Review. It will also allow 10 chapters of knowledge MCQs instead of one additional each week.

Should I keep the altered plan? I am getting into GOV and the other bear chapters. I am nervous but could correct this week and go back through chapters F1 – F7 for MCQs. Thanks!

Journey Started - January 2015
FAR - 4/2015 - Passed
AUD - 7/2015 - Passed
BEC - 8/2015 - Passed
REG - 11/12/2015 - Passed

[JS867_5309]

@Determined CPA – That explanation doesn't make any sense to me either. I'm not sure how they got to the $3,000 loss that nets to 0, and obviously I was also wrong on the calculation. Hopefully another NINJA can help.

@jbarwick – In my experience, the plan that allows for the maximum MCQ questions is the way to go. I only did those intermittently for my first 3 exams (well, 4) and came close-but-no-cigar each time. Once I buckled down and put the MCQs as a priority, my scores improved dramatically. My goal is to study 4 hours each day Mon-Fri, but usually average 2-3. Sat and Sun are full-on study days with short 5-10 minute breaks ever hour and a 1 hour break 2x a day…and maybe a trip to the grocery store. I try to get all of the reading and videos knocked out and focus on non-stop MCQs for at least 3 weeks before the test. Since this is my first time taking FAR, I'm going to add in the major note re-write at the end of March/beginning of April. I'm aiming for a NINJA trending score of 85%.

Exam:I'm done 🙂 🙂 🙂
REG - 71 (2/22/14); 67 (4/3/14); 74 (8/29/15); 83 (2/29/16)!!!
BEC - 72 (5/24/14); 85 (1/3/15)!!!!
AUD - 72 (8/23/14); 76 (10/15/14)!!!
FAR - 77 (5/26/15)!!!

Started in 2013 using Kaplan and failed REG, REG, BEC, AUD. Switched to NINJA suite in Sept 2014 and passed AUD...then BEC...then FAR!
REG took 2 tries but I finally got it in too!
I'm a hard convert - Using NINJA method with NINJA video/book/notes/MCQ

Education: Check
Experience: 3 months left! I hit 4 years on May 30 🙂

[Determined CPA]

Wood Co.'s dividends on noncumulative preferred stock have been declared but not paid. Wood has not declared or paid dividends on its cumulative preferred stock in the current or the prior year and has reported a net loss in the current year. For the purpose of computing basic earnings per share, how should the income available to common stockholders be calculated?

Answer : The dividends on the noncumulative preferred stock and the current-year dividends on the cumulative preferred stock should be added to the net loss.

Explanation:

In determining basic earnings per share, cumulative preferred dividends reduce the amount available for common shareholders. Consequently, net income should be reduced or net loss increased for the amount of the cumulative dividend.

I picked: The current-year dividends and the dividends in arrears on the cumulative preferred stock should be added to the net loss, but the dividends on the noncumulative preferred stock should not be included in the calculation.

Isn't the explanation and the answer contradicting each other?

A - 75
B - 78 God is good.
F - 77 Answered prayers.
R - 84! Done!!

Paperwork sent - waiting for license!!
Still on a cloud and in shock. Through God, all things will happen.

[jbarwick]

@determined

Only current year dividends are subtracted. So you subtract the noncumulative (as it was declared which is when you debit RE) and also subtract current cumulative dividends.

Basic EPS = (Net Income – Preferred Dividends) / WACSO

@JS867 I study 2-3 hours a day weekdays (take Fridays off usually) then study on weekends probably 4-5 hours maybe more. My notes are basically notes from the Becker e-book which encompasses everything! I am on my 5th or 6th 50 page notebook so far. I also make flashcards of what I think will be helpful and go through those. I am married so I spend time with my wife and my job does not depend on a CPA so I can take it slower…but I don't want to throw money away. I am hoping for 3 weeks of final review now and 200-300 MCQs a day weekday and 400-500 on weekends if possible but I count 1 MCQ = 2 minutes so that is a lot of time! I have started saying out loud why something is right and why something is wrong which helps when a question I have not seen before comes up.

I may reread the Becker book but think MCQs will be the better choice and if I can't fully explain and answer to look at the reason why it is a specific answer.

Journey Started - January 2015
FAR - 4/2015 - Passed
AUD - 7/2015 - Passed
BEC - 8/2015 - Passed
REG - 11/12/2015 - Passed

[kleon52]

For those who are struggling with accrual to cash, and vice versa. I will give you the formula to make these problems 100% guarantee easy points

A = L + SE

Cash + Other Assets = L + SE

Cash = L + SE – Other Assets

Change in Cash = Change in Liabilities + Change in SE – Change in Other Assets

For Accrual to Cash (regarding revenue/sales)

Sales/Revenue Accrural

+ Change in Liabilities

+ Change in SE

– Change in Other Assets

= Cash in Cash Basis

Example: Sales in Accrural = 100k

Prepaid rent increased by 10k in a year

A/P increased by 20k

100k

+20k

-10k

= 110k in cash

To go from cash to accrual just invert the + –

Expenses Accrual to cash

Sales/Revenue Accrural

– Change in Liabilities

– Change in SE

+ Change in Other Assets

= Expenses in Cash Basis

Cash to acrual just invert the + – in the above formula

REG: 80
AUD: 82
BEC: 83
FAR: 83
Finished Feb 2015, 5-6months

Ninja MCQ for AUD, BEC, & FAR

[FIFOisbetterthanLIFO]

Hey guys, for those of you who aren't sure how important journal entries are for FAR let me just say this…THEY ARE SO IMPORTANT! Not only for understanding and helping you through MCQs, but the SIMs absolutely do test these and they are majorly important to your success in FAR.

FAR - Passed (82)
BEC - Passed (76)
AUD - Passed (89)
REG - Passed! (81)
AICPA Ethics

Licensed CPA

[Author]

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