FAR Study Group Q1 2017 - Page 112

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    Topic
  • #1396517
    jeff
    Keymaster

    Welcome to the Q1 2017 CPA Exam Study Group for FAR. 🙂

Viewing 15 replies - 1,666 through 1,680 (of 2,502 total)
  • Author
    Replies
  • #1500246
    Kala
    Participant

    Thanks for making me feel like I'm not going crazy – at least not yet! I am just hoping that I can remember enough (or BS enough) to make it through. Best of luck to everyone!!

    #1500283
    mtaylo24
    Participant

    Gleim Ch 5, is a silent killer. Why would you put cash, fvo, marketable securities, equity method, bonds, and cash surrender value in one chapter!?!?

    AUD - 1st - 60 (12/12), 61 (2/13), 61 (8/13), 78! (11/15)
    REG - 55 (2/16) 69 (5/16) Retake(8/16)
    BEC - 71(5/16) Retake (9/16)
    FAR - (8/16)

    #1500315
    mtaylo24
    Participant

    Can someone confirm that this is now the correct answer (It used to be a)?

    On January 1, Point, Inc., purchased 10% of Iona Co.’s common stock. Point purchased additional shares bringing its ownership up to 40% of Iona’s common stock outstanding on August 1. During October, Iona declared and paid a cash dividend on all of its outstanding common stock. How much income from the Iona investment should Point’s income statement report?

    A. 10% of Iona’s income for January 1 to July 31 plus 40% of Iona’s income for August 1 to December 31.
    B. 40% of Iona’s income for August 1 to December 31.
    Answer (B) is correct.
    Once the ownership percentage increased from 10% to 40%, Point was presumed to exercise significant influence over Iona. Thus, Point applies the equity method prospectively from the moment significant influence is achieved (August 1). Given that Point held 40% of Iona’s common stock beginning August 1, it should recognize its share (40%) of Iona’s income for the period August 1 to December 31.
    C. 40% of Iona’s full-year income.
    D. Amount equal to dividends received from Iona.

    AUD - 1st - 60 (12/12), 61 (2/13), 61 (8/13), 78! (11/15)
    REG - 55 (2/16) 69 (5/16) Retake(8/16)
    BEC - 71(5/16) Retake (9/16)
    FAR - (8/16)

    #1500387
    NYaccountingstudent
    Participant

    Just scored a 76 on the first Becker Practice Test (73 on MCQ and 81 on SIMS)

    #1500390
    NYaccountingstudent
    Participant

    @mtaylo24 I would have answered A also…..was there a rule change or something?

    #1500406
    Mscfisher
    Participant

    #aatoural I'm not sure if anyone answered your question but I first uses the effective interest method not straight line for bonds

    #1500408
    mckan514w
    Participant

    @mtaylo- yes B is correct- the new accounting rules make recognition of significant influence gained / lost a prospective action. Look back @aa posted on where significant influence was lost over the weekend-

    Managed to stress myself into a major migraine yesterday- also think its this weather and the early spring/ pollen counts- WTH! This thing truly sucks- I MUST PASS… off to it- Good luck everyone today!

    and they ask me why I drink...

    FAR- 61-next time I'll ask for lube instead of a calculator
    REG-75- Never been so happy to see such a low grade
    BEC- 8/11
    AUD- 9/2

    #1500415
    Holly
    Participant

    Bach Co. adopted the dollar-value LIFO inventory method as of January 1, 20X0. 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:
    at Base- at Current-
    Date Year Cost Year Cost
    ———- ——— ———–
    01/01/X0 $90,000 $90,000
    20X0 layer 20,000 30,000
    20X1 layer 40,000 80,000

    What was the price index used to compute Bach's 20X1 dollar-value LIFO inventory layer?

    I'm seeing different answers for this question on the internet. What do y'all think?

    A. 1.09
    B. 1.25
    C. 1.33
    D. 2.00

    BEC - 79
    REG - 85
    AUD - 5/27/16

    #1500417
    GiniC
    Participant

    @HRSexton – is it D 2.00?

    #1500418
    Holly
    Participant

    It is 2. I got 1.33

    BEC - 79
    REG - 85
    AUD - 5/27/16

    #1500420
    Anonymous
    Inactive

    Not looking forward to taking FAR for the 3rd time

    #1500421
    mckan514w
    Participant

    Im going with 2 as well…. Price Index = Inventory at end-or year Price / Inventory at Base-year Price

    and they ask me why I drink...

    FAR- 61-next time I'll ask for lube instead of a calculator
    REG-75- Never been so happy to see such a low grade
    BEC- 8/11
    AUD- 9/2

    #1500423
    Holly
    Participant

    I read in Becker that it is COST and not LAYER?

    1/Year 1 $90,000 $90,000 $90,000
    Year 1 Layer 20,000 30,000 21,818
    [Note 1] 110,000 120,000 111,818
    Year 2 Layer 40,000 80,000 53,333
    [Note 2] $150,000 $200,000 $165,151

    [Note 1] Price Index $120,000/$110,000 = 1.09 LIFO Layer $20,000 x 1.09 = $21,818
    [Note 2] Price Index $200,000/$150,000 = 1.33 Answer “c” LIFO Layer $40,000 x 1.33 = $53,333

    BEC - 79
    REG - 85
    AUD - 5/27/16

    #1500429
    GiniC
    Participant

    @HRSexton – you added all three years' inventories together to get a “blended” ratio. What you're looking for is the ratio for that 20X1 year on its own, so you use 80,000/40,000=2.00

    #1500435
    Holly
    Participant

    Ugh….

    BEC - 79
    REG - 85
    AUD - 5/27/16

Viewing 15 replies - 1,666 through 1,680 (of 2,502 total)
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