[jeff]

Welcome to the Q1 2016 CPA Exam Study Group for FAR.

Some BLITZ videos to help your exams: https://www.another71.com/ninja-blitz

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

[Anonymous]

I will be praying for all of us to pass this exam! this is my last exam, it is scheduled for Feb 29th and I just finished Becker Chp 5. Don't even ask me anything about chapters 1-4.. how do people remember all of this? I need to pass, we all need to pass!
i am so scared , as I am sure we all are, i only will have two opportunities to pass this exam as REG expires next window and I dont want to see myself in that situation of having to study for REG again.

[Anonymous]

I am still having a hard time to fully understand cash flow statements! My exam is Feb 2nd and I must pass or I will lose REG!
REG: 77
BEC:73/74/81
AUD:58/76
FAR: 74/ Feb 2nd

[hitmi]

i wonder why we have to deduct GP and how did they come up with the GP i can't see any sales & COGS.

Selected data for two subsidiaries of Dunn Corp. taken from December 31 , Year 1 pre-closing trial balances are
as follows:
Banks Co. Lamm Co.
Deb..i1. CrefJi1.
Shipments to Banks $- $150,000
Shipments from Lamm 200,000
Intercompany inwntory profit on total shipments 50,000
Additional data relating to the December 31 , Year 1 inwntory are as follows:
lnwntory acquired from outside parties $175,000 $250,000
lnwntory acquired from Lamm 60,000
At December 31 , Year 1, the inwntory reported on the combined balance sheet of the two subsidiaries should be:
a. $485,000
b. $435,000
C. $425,000
d. $470,000
Explanation
Choice “d” is correct, $470,000.

FAR 06/09/2016 | 2014 (42) Didn't Study for it | 2015 (54)
Audit (66) i was expecting (99)

will Ninja MCQs make the difference in 09 June, Lets wait!

[HorseandHound]

I have been having a problem where Wiley and Gleim have a different solution for the same problem. Please see below

Bach Co. adopted the dollar-value LIFO inventory method as of January 1, year 4. 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
Date Base Year Cost At Current Year Cost
1/1/Year 4 $90,000 $90,000
Year 4 layer $20,000 $30,000
Year 5 layer $40,000 $80,000

What was the price index used to compute Bach's Year 5 dollar-value LIFO inventory layer?

A. 1.09

B. 1.25

C. 1.33

D. 2.00

Wiley sais D, Gleim sais C. I have gone back in forth with some people way smarter than me and the answer apparently is C. Why is this case an exception to how we normally calculate price indices?

Thanks in advance

[SIMmer Down]

@HorseandHound Don't waste your time with dollar value LIFO. The chances of you seeing it are very slim. If you do, it will be 1 MC question MAX.

BTW: I'm just trying to save you time when I say that. The risk/reward pay off isn't worth it. You're better off studying something like Gov or EPS.

[kcoops44]

Main, a pharmaceutical company, leased office space from Ash. Main took possession and began to use the building on July 1, Year 1. Rent was due the first day of each month. Monthly lease payments escalated over the 5-year period of the lease as follows:

Period
Lease payment
July 1, Year 1 – September 30, Year 1
$0 – rent abatement during move-in, construction
October 1, Year 1 – June 30, Year 2
17,500
July 1, Year 2 – June 30, Year 3
19,000
July 1, Year 3 – June 30, Year 4
20,500
July 1, Year 4 – June 30, Year 5
23,000
July 1, Year 5 – June 30, Year 6
24,500

What amount would Main show as deferred rent expense at December 31, Year 4?
a.
$71,550
b.
$50,658
c.
$52,580
d.
$68,575

I selected the correct answer, A $71,550 just because I guessed. I'm not sure how to actually get the answer. The solution wasn't very helpful.

[marqzho]

Straight line rent = (17500*9+19000*12+20500*12+23000*12+24500*12)/5/12 = $20,025/month
Up to Dec 2014 rent expense =$20025*42 = $841,050
Up to Dec 2014 rent paid = 17500*9+19000*12+20500*12+23000*6 = $769,500

so deferred rent is $71550

put it in a JE, it should look like this :
Dr Rent Expense 841050
Cr. cash 769500
Cr. Deferred rent expense 71550 <–plug

REG 90
FAR 95
AUD 98
BEC 84

[HorseandHound]

I appreciate the advice @SIMmer down, I have moved on but I am just genuinely interested in feedback.

[kcoops44]

marqzho- thanks a lot!! That makes way more sense to me!

[SIMmer Down]

@HorseandHound Here's your Becker answer:

View post on imgur.com

[excel monkey]

@HorseandHound
@SIMmer Down

Both answers are correct, because they are not the same questions (very close, but different).

Becker/Gleim provide At Current Year Cost in the last column
Wiley provides At Dollar Value LIFO in the last column

Overall though, I agree with SIMmer Down in that there are much better areas in which to expend your energy.

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

[HorseandHound]

But don't we typically divide current year cost by base year cost to calculate price index for new layer? Based on the requirement of the question I am trying to understand how it is not 2. And also am I wrong to think that price index=current year cost/base year cost 99.9% of time except for this problem for some reason? Appreciate the responses @excel monkey and @ SIMer Down, what word sequence in the question would have to change in order to make the answer 2?

[excel monkey]

@HorseandHound

1) The formula is Ending Inventory @ current year cost/Ending Inventory @ base year cost. For the problem you presented, this would be 200K/150K, or 1.33 (90+30+80/90+20+40). You would then apply this index to the Year 2 layer @ base year cost to get the Dollar Value LIFO for that layer, or 53,333 in this case.

2) Double check your book, but from what I can find the Wiley problem already gives you the Year 2 layer at Dollar Value LIFO. Therefore you simply have to divide it by Year 2 layer @ base year cost, or 80,000/40,000 = 2.0

The difference is in what they label the last column (and therefore the information they provide you) of the table, Becker/Gleim call it @ Current Year Cost, while Wiley calls it @ Dollar Value LIFO. This is the difference between the two problems, and how the answer for one can be 1.33 while the other can be 2.0

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

[SIMmer Down]

Can someone please verify these JEs for a Governmental Interfund Transfer moving resources FROM the Special Revenue TO the Capital Projects fund using Due To/From.

JE to record Transfer Out of Special Revenue Fund

Dr. Other Financing Uses [Transfers Out]
Cr. Due To Capital Projects Fund

JE to record Transfer In/Receipt of resources into Capital Projects Fund

Dr. Due From Special Revenue Fund
Cr. Other Financing Sources [Transfers In]

[JSM]

I am alive after yesterday's exam (lol). Hopefully this gives some of you guys positive vibes: it was NOT as brutal as the first time I took. Sims were extremely manageable (way more journal entries this time than boxes that require dollar amounts that can range from negative infinity to positive infinity.. Those always set me up to lose) and although the second MC testlet was sometimes a different language to me, I took comfort in the fact that a difficult testlet means I was doing an okay job. Last time I sat for far it was a blur of educated guesses and racing against the clock. This time I really think I put up a good fight, was focused, and finished comfortably with 7 minutes left.

Now, even though it wasn't as much of a bloodbath as I expected, it is hard to be hopeful because you just never know with this exam. Now I spend two and a half weeks praying with every bone in my body that curve falls in my (and our) favor. I am wondering whether I knew the material or underestimated the exam and just THINK it didn't go too badly.

Keep studying everyone! Journal entries!!!! We will see 🙂

FAR - 1/17 [67]
AUD - 76 (Feb, 2015)
REG - 78 [70, 74] (July, 2015)
BEC - 80 (May, 2015)

[Author]

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