[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

[KJF1031]

@marqzho. Actually just came across a question like this. It would be:

DR: Land 80
CR: C/S 10
CR: APIC 70

BEC: Passed (8/31)
AUD: Passed (11/20)
FAR: Passed (2/26)
REG: 5/22

[marqzho]

Thanks KJF1031 , tapilidj

REG 90
FAR 95
AUD 98
BEC 84

[Claudia408]

What is unplanned service cost? Why wasn't this included in the calculation for Pension Expense?

On June 1, 20X8, Ward Corp. established a defined benefit pension plan for its employees. The following information was available at May 31, 20X10:

Accumulated benefit obligation $14,500,000
Projected benefit obligation 12,000,000
Unfunded accrued pension cost 200,000
Plan assets at fair market value 7,000,000
Unrecognized prior service cost 2,550,000

To report the proper pension liability in Ward's May 31, 20X10, balance sheet, what is the amount of the adjustment required?

Answer: 4,800,000

BEC - 75 (3x)
AUD - 78 (3x)
REG - 67, 66, Aug 1
FAR - 54, Sept 8

[marqzho]

Accumulated benefit obligation $14,500,000
Projected benefit obligation 12,000,000
Unfunded accrued pension cost 200,000
Plan assets at fair market value 7,000,000
Unrecognized prior service cost 2,550,000

Ending PBO is 12m and FV plan asset is 7m, it means the plan is under funded for 5m and we have a “target” of 5m. The unadjusted accrued pension cost is 200k, so we need to have a 4.8m adjustment.

Dr. OCI 4.8m
Dr. Deferred tax if any xxxx
Cr. Accrued pension cost 4.8m

There is a example in Roger's textbook P14-8

When the question give you a ending PBO, current pension cost is already included in it.

REG 90
FAR 95
AUD 98
BEC 84

[marqzho]

Just finished all MCQ in Wiley Test Bank

1501 Answered | 1141 Correct = 76%

And I have one week to go 🙂

REG 90
FAR 95
AUD 98
BEC 84

[marqzho]

One stupid question for People who already took one section of the exam :

Do we need to press “exit” before running out of time for the answer to be saved in the system?

Or it will automatically save all my answer once the remaining time hit zero?

REG 90
FAR 95
AUD 98
BEC 84

[Claudia408]

marqzho – you're a MCQ animal!!! you're gonna pass! anyhoo, i've read even if you don't click exit it will save whatever you've done.

BEC - 75 (3x)
AUD - 78 (3x)
REG - 67, 66, Aug 1
FAR - 54, Sept 8

[Claudia408]

can someone dumb down this topic for me? For Treasury Stock repurchase Cost and Par Methods – I'm totally lost! What are the differences between the two? I know the JEs are different but I guess I'm lost with what's the main idea for each method.

BEC - 75 (3x)
AUD - 78 (3x)
REG - 67, 66, Aug 1
FAR - 54, Sept 8

[KJF1031]

@Claudia408

Cost Method

Is an unallocated deduction from total S/E
It records G/L when you reissue/retire
Record items at reacquisition cost

Par Value Method

It is a deduction from Capital Stock
It records G/L upon buy backs
Record items at par value

BEC: Passed (8/31)
AUD: Passed (11/20)
FAR: Passed (2/26)
REG: 5/22

[marqzho]

Think about this case:

A pen cost you $ 1 to make. you sold a pen for $2, then brought it back for $2, and then re- sold it again for $3

How much is profit in the above situation?
Ans: $2 dollar – but how do you interpret that profit?

Cost method said, you make $1 when first sold, and make another $1 when resold since your cost is $2, so total is $2.
Par Value method said, you make $1 at first, then loss $1 when purchase back the pen. Then you make $2 profit when resold the pen since the pen cost you $1 to make.

Profit here is like APIC in a sense

No matter which method, it will get you the same Equity total at the end. Cost method will create a contra Equity account and Par Value method will create a contra C/S account. It just affects how T/S present in the F/S.

REG 90
FAR 95
AUD 98
BEC 84

[Anonymous]

Just starting to take exams, projected dated for FAR was 02/29, but started new job at Deloitte so things got pushed back, now this is the projected dates:
FAR: 04/02
AUD: 05/28
REG: TBD
BEC: TBD

I am finishing before 2017. Note to self: take it once and once only!!!!!

[PleaseDontDeleteThanks]

Pica, a nongovernmental not-for-profit entity, received unconditional promises of $100,000 expected to be collected within one year. Pica received $10,000 prior to year-end. Pica anticipates collecting 90% of the contributions and has a June 30 fiscal year-end. What amount should Pica record as contribution revenue as of June 30?

A. $10,000
B. $80,000
C. $90,000
D. $100,000

Umm, Ninja says 90,000. due to “FASB ASC 958-605-30-6, such contributions may be recorded at net realizable value, or net of any allowance for uncollectible pledges.”

Honestly, I thought that foundations estimated collectability by recording an expense and netting against an allowance account…god I'm going to fail.

FAR 72, 89
BEC 80
REG 90
AUD 79

[Claudia408]

@marqzho – just viewed Roger lecture 15.03 – what's the take away here? I feel like he just started talking but didn't tell me anything??? lol

BEC - 75 (3x)
AUD - 78 (3x)
REG - 67, 66, Aug 1
FAR - 54, Sept 8

[Spartans92]

Hudson Hotel collects 15% in city sales taxes on room rentals, in addition to a $2 per room, per night, occupancy tax. Sales taxes for each month are due at the end of the following month, and occupancy taxes are due 15 days after the end of each calendar quarter. On January 3, Year 2, Hudson paid its November, Year 1 sales taxes and its fourth quarter Year 1 occupancy taxes. Additional information pertaining to Hudson's operations is:

Year 1
Room Rentals Room Nights

October
$100,000 1100

November
110,000 1200

December
150,000 1800
What amounts should Hudson report as sales taxes payable and occupancy taxes payable in its December 31, Year 1, balance sheet?

a.
Sales Taxes Occupancy Taxes
$39,000 $8,200
b.
$54,000 $6,000
c.
$54,000 $8,200
d.
$39,000 $6,000

The Answer is A. Per explanation the October sales taxes were paid.
I don't get that part.. Am I missing something. I do notice it says the November sales taxes were paid in Year 2 and the sales taxes of that month is paid the following month. So November is paying for October? I am somewhat confused and this is a redo question. Can someone please explain to me. Thanks I get the 2nd part but just not the first.

BEC- PASS

[KJF1031]

@Spartans92

Sales tax was paid for October in the following month, which is December, therefore it is no longer “payable,” since they paid it off during the year. November will be paid in January and is still payable, along with December being paid in Feb which is also still payable.

BEC: Passed (8/31)
AUD: Passed (11/20)
FAR: Passed (2/26)
REG: 5/22

[Author]

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