[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

[KJ]

Finally got approval from the board eligible to sit for exam. Here I come to tame this CPA. I have not received my payment coupon yet. In 12 minutes is my anniversary and going out for a good dinner with wifey tomorrow, will become bookworm for next 12-18 months starting Thursday. Using Ninja 10 point combo and 2015 Wiley for MCQ. Wish me luck!!!!!!

FAR - August 2016
AUD - September 2016
REG - October 2016
BEC - November 2016

Remember: "Everything should be made as simple as possible, but not simpler." - Albert Einstein

[nib]

hello friends ,

If below mcq is capital lease , we need to consider useful life of asset . in that case we need to consider useful life ,6 yrs . but it shows lease term 5 yrs used . why ?

A company leases a machine from Leasing, Inc. on January 1, year 1. The lease terms include a $100,000 annual payment beginning January 1, year 1. The machine's fair value is $500,000 and the residual value is estimated at $20,000. The company guarantees the residual value. The useful life of the machine is six years, and the lease term is five years. The implicit rate of interest is 6% and is known by the company. The following present value factors are provided:

Five Years Six Years
Present value of $1 at 6% 0.7473 0.7050
Present value of an annuity due at 6% 4.4651 5.2124
Present value of an ordinary annuity at 6% 4.2124 4.9173

What is the value of the machine in the company's balance sheet at lease inception?
A. $446,510
B. $461,456
C. $520,000
D. $535,340
corect answert = B =$461,456

explanation'
The value of the machine from the capital lease is the present value of the minimum lease payments (using the annuity due factor) and the present value of the guaranteed residual value, over the five-year lease term, as follows: ($100,000 × 4.4651) + ($20,000 × 0.7473) = $461,456.

[nib]

@ Andyred04

THNKS

[marqzho]

bin

If it is classified as a capital lease because of title transfer or bargain purchase option, you will depreciate for its useful life. If it is classified as a capital lease because of 75% life or 90% FV , you will depreciate for its lease term.

Think about this: if at the end of the lease, you will return the asset to the lessor, it doesn't matter the asset can live for another million years. The lease term is the only thing that matters to you.

REG 90
FAR 95
AUD 98
BEC 84

[Anonymous]

@marqzho, I felt the same way and passed with a 84!! Took my exam Feb 2nd. My first testlet was easy and I only flagged may be 2 MCQs. 2nd Testlet was way harder and took me longer to complete it. 3rd one was in between 1 and 2. I felt pretty good about the MCQs and had a lot of time left for the SIMS. I finished the SIMS and had 45 mints left and did not feel like pressing the exit key knowing that it was my last chance or will have to retake REG. I reviewed all SIMS again, checked some on the AL and waited until almost the time was up to submit the exam. I had a good feeling when I left the testing center but still you never know with this exams. This was my 2nd attempt at FAR and was 100% different as my first attempt. Took FAR at the end of November and felt very good about the MCQs but could not finish 2 sims because I ran out of time. Sims were long, complicated and took me a while to figure out what they wanted and ended up with a 74!
REG:77
BEC:73/74/81
AUD:58/76
FAR:74/84 DONE and FOREVER!!!

[marqzho]

Aguspesci78

I already went back and forth on the material during my study. I knew what my weakness and strength are in different area and I really felt I was well prepared for the exam, but my second testlet was soooooo difficult. And it was to a point where I thought the concept behind around 10 of them were never even mentioned in Roger review course, IPQ, or Wiley Test Bank. So in other words, no matter how many more hours I spend on Roger and Wiley's material, I can't still score those questions. That's the most frustration part 🙁

REG 90
FAR 95
AUD 98
BEC 84

[Anonymous]

@marqzho, Hopefully some of those were pretest and you will get a passing score 🙂

[nib]

@ Aguspesci78

please tell me ,
what is pretest ?

[marqzho]

bin

There are a little portion in the exam that won't be counted toward your score. You won't know which one are pretest questions. They put those questions in there to see how the candidate perform on the them. If the result meet their criteria, they will put those as real questions in the future.

Let say in FAR exam, 15 out of 90 MCQ are pretest and 1 out of 7 SIM is pretest.

REG 90
FAR 95
AUD 98
BEC 84

[wombataholic]

@bin Pretest questions appear in the exams for NASBA to evaluate whether to use the question for a future exam. These pretest questions don't count against your score, nor do they help your score.

Per the AICPA, there are 15 pretest MCQs in FAR/AUD and 12 in BEC/REG, as well as 1 pretest sim in FAR/AUD/REG. So if you sit for FAR, of the 90 MCQs you'll see, 15 will be pretest and of the 7 Sims, 1 will be a pretest. The pretest questions are presented the same as the real ones, so you (in theory) won't know which are the real question.

Licensed CPA
Passed each section on the first try with Ninja Notes/MCQ/Audio

[KJ]

@ wombataholic…you only studied with Ninja notes/mcq/audio no other material? I am asking because I am starting my CPA journey today and I am planning to buy Ninja 10 point combo and will use 2015 Wiley MCQ that I got from my friend to practice questions. In your opinion, does Ninja 10 point combo should be good enough or not?

FAR - August 2016
AUD - September 2016
REG - October 2016
BEC - November 2016

Remember: "Everything should be made as simple as possible, but not simpler." - Albert Einstein

[Claudia408]

stupid question here:

West Corp. leased a building and received the $36,000 annual rental payment on June 15, 2004.
The beginning of the lease is July 1, 2004. Rental income is taxable when received. West's tax rates are 30% for 2004 and 40% thereafter. West has elected early adoption of FASB Statement No. 109, Accounting for Income Taxes. West had no other permanent or temporary differences. West determined that no valuation allowance was needed.

What amount of deferred tax asset should West report in its December 31, 2004 balance sheet?

Answer: 18000*40%=7200

why not the 30% tax rate? isn't that the rate for 2004 and it's asking for the amount in 2004?

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

[CPATG17]

Getting Started 🙂

AUD – May
REG – August
BEC – Nov
FAR – April ‘2017

AUD - 08/23/2016
REG - TBD
BEC - TBD
FAR - TBD

[marqzho]

Claudia408

If the question asks for current year tax liability, you use the current tax rate. If it ask for current year deferred tax liab/ asset, you use the future rate.

To this question
you will have these entries in 2004
Dr. tax expense 3600 <-plug
Dr. deferred tax asset 7200 (Temp difference * future rate)
Cr. Current tax liability 10800 (taxable income * current rate)

and in 2005:
Dr. tax expense 7200 <-plug
Cr. Deferred tax asset 7200 (target 0)
Cr. Current tax liability 0

At the end of two year, both book $ and tax $ would be the same.
you pay $10800 tax
and you have $10800 tax expense.

REG 90
FAR 95
AUD 98
BEC 84

[nib]

@marqzho
@ wombataholic

thnks for explanation of pretest

[Author]

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