[jeff]

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

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

[Scared-cpa]

Okay, thanks. That's what I thought and it says that is correct according to the questions, I was just wondering if the interest would ever accumulate with principal in the permanent account before going into temp for specific services if the monies weren't utilized yet.

Also….I am freaking out now about scheduling my exam and I was hoping someone could give me sound advice on it! I have been studying for a retake since around the 13th of December and was planning on sitting the 17th of this month. However, I hadn't reserved a spot yet because I'm an idiot and now that time slot has been removed. Now I am up taking it Friday, the 13th. Lovely, isn't it? I feel pretty well prepared but this unexpected jump in times has officially freaked me out and now I am a jittery mess. I just now paid my payment coupon and am waiting for my NTS so I can reserve Friday. What should I do from now until this upcoming Friday to fully prepare? I have been doing Ninja MCQs and am about 2/3 of the way through adaptive. It doesn't look like I'm going to hit review now, unfortunately. I'm trending at 75% but I don't know if this is good enough? I'm going to start doing more sims now because I know I bombed them my first go around. My thoughts were to just keep doing MCQs, SIMS, and review the notes I have taken until test day. Does this sound okay? Anything else I should/should not do?

Please help!!! Any advice is welcomed!

[mckan514w]

@scared_cpa I don't think that anything other than perm. restricted funds ever go into the perm reserve account and moved out… It is not set up like the temporarily restricted account in which things move in and out of based on timing, need, restriction etc…. I mean I guess in theory it all sits there collecting interest in the perm account and then is moved out when interest is earned but I don't think it is accounted that way. For example Donor Y gave XZZ non-profit 100 with the stipulation that it never be spent but any interest earned could go towards anything they wanted.
DR Perm Restricted Fund 100
CR Prem Restricted Revenue 100

Interest earned in the first year equaled 4
DR Unrestricted Fund 5
CR Interest Revenue 5

Not sure my DR/CR titles are correct but am almost positive that the flow of funds is…

Hope that helps!

PS: I would keep doing what you are doing! MCQ's and SIMs- brush up on your Journal Entries as well- GOOD LUCK!

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

[Scared-cpa]

Thank you! The only other thing I can think of is could someone help clarify when to consider interest as part of a payable or receivable? I don't have a particular question in front of me right now but I've noticed that sometimes if you have a note payable or receivable, you record it at present value of principal AND interest and sometimes you don't include the interest as part of the note when you record it. What exactly are the guidelines on this? This is one of the things (along with pension plans) that I struggle to fully grasp.

[Anonymous]

@scared_cpa. An entity needs to accrue interest payable on bonds, notes payable and other debt instruments that have a stated interest rate. For instance, a company may have a bond that pays a stated interest rate of 5% semiannually or annually or whatever. The company needs to accrue the interest up to the payable date to reflect the interest expense. Here are the journal entries:

Debit interest expense
Credit interest payable

When the interest is due, the entry is:

Debit interest payable
Credit cash

Second part of your question is accruing interest receivable on a note receivable. If an entity has a note receivable that has a stated rate of interest then you must accrue the interest income. The journal entries:

Debit accrued interest receivable
Credit interest income

When the interest (and principle) is received:

Debit Cash
Credit accrued interest receivable
Credit note receivable

You need to go back and study these concepts in depth; you will need to be very proficient in these areas as many of the questions involved accrued interest payable/receivable/ expense and other considerations.

Hope this helps as a primer.

Edit: Also, the entries that I presented do not include bond amortization and effective interest method. Those are also very important concepts that you will have to master.

[waffle_house]

I breezed through F4 in Becker and when I got to the optional questions they really kicked my ass. Anyone else have this experience?

Also anyone understand the details behind retail inventory?

[GiniC]

@Waffle_House – Ugh – still struggling with Acquisition Method in F3. I'm actually saving most of the Optional Question sets for my two-week review before testing. I'm hoping those help bring the details back to the “front” of my mind. Hoping to take this once – then be done!

[garciarb]

Question 5 on Lecture 65 Cost and Equity Method Ninja Videos was really throwing me for a loop until I figured out that the powerpoint doesn't match what Bob is saying. I love the videos but things like this lower the value a bit.

BEC - 81
AUD - 79
REG - June 2016 (Thanks Nasba!)
FAR - ugh

[A1lessio]

@Ginic- I reviewed F3 today and redid all the mcq problems. scoring around 65-70%, but also making some silly mistakes.

I would definitely skip the optional questions for now and redo them during your review. They are much harder and when you understand the concepts better I think you will learn more and be able to score higher.

FAR is so daunting!

AUD (08/02/2016)

[A1lessio]

For the people who have taken FAR would you say the MCQ's are easier than the review material? For Aud and Reg I felt like they were shorter and more to the point. Some were very easy.

AUD (08/02/2016)

[Tarheel83]

@A1lessio I used the Wiley Test Bank for FAR and yes, I would say that the MCQ's are easier on the exam than on the review material. At least that was my take on it. A little background first. I took FAR for my first attempt December 10th (or a couple days prior, I cant remember exactly). I also just retook FAR today. I was consistently hitting about 60 to 65% on the questions and on my first attempt I got a 73. I would definitely say that the Wiley Test Bank questions prepares you well. I have also used the NINJA MCQ to help me pass AUD. I do recommend the NINJA MCQ over Wiley, but Wiley is good too. It just happens to be available with my CPA Excel membership, so I am using it to prep for now.

[j3cpa]

The following condensed balance sheet is presented for the partnership of Smith and Jones, who share profits and losses in the ratio of 60:40, respectively:

Other assets $450,000
Smith, loan $20,000

Accounts payable $120,000
Smith, capital $195,000
Jones, capital $155,000

The partners have decided to liquidate the partnership. If the other assets are sold for $385,000, what amount of the available cash should be distributed to Smith?

Does anybody know how to calculate this with and maybe provide some JE so I can understand what's going here… It's 1:00 AM in the morning and this is driving me nuts!

Study Material:
GLEIM
BEC - FEB/2012
AUD - FEB/2012
FAR - JULY/2012
REG - JULY/2012

[A1lessio]

j3pa – these questions take forever to calculate. I'll try my best to explain.

So any partnership question like this I draw out a table with these items on top Cash – Equip – loan- A/P – and the equity accounts so Smith – Jones Cap

They sold the asset at a loss: of 65,000 ( $385,000-450,000). So cash goes up by $385,000 but the 65,000 loss reduces the equity account 60% and 40%
Smith: 195,000-39000 = 156000 (Your answer.. i really hope)
Jones 155,000-26,000 =129000

Next we have to pay off the A/P of 120,000. So cash is reduced to $265,000 (385000-120000)

The last thing is the Smith loan of $20,000 which is a direct reduction to jones capital and not to cash. So Jones Capital is 129,000-20,000 = 109,000.

Notice that the remaining cash on hand $265,000 = 156,000 (smith's capital) + 109,000 (jones Capial). – a good check to see if you're correct.

The chart at the top acts as debits/credits. For instance paying off the a/p removed it completely from the table and reduced the cash balance.

Hope this helps!

AUD (08/02/2016)

[Leanne]

Hi,
Can someone help me explain this question? I'm lost on the difference between the BEPS and DEPS.

Chape Co. had the following info related to common and preferred shares during the year:

Common shares outstanding 1/1 700,000
Common shares repurchased 3/1 20,000
Conversion of preferred shares 6/30 40,000
Common shares repurchased 12/1 36,000

Chape reported N/I of 2,000,000 @12/31, what amount of shares should Chape use as the denominator in the computation of Basic Earnings Per Share?

a. 740,000
b. 700,000
c. 684,000
d. 702,000

So the correct answer is supposed to be D: 702,000, which means that the conversion shares are included in the WASCO calculation.
But I remembered that the conversion shares should be included in the Dilutive EPS, instead of the BEPS?
But why they include the conversion in the BEPS WASCO cal?

Thank you guys a lot!

[yazoon81]

@Lian Chen

Conversion of preferred shares is resulted to increase common shares which in this case should be added to the calculations of WACSO.

[Scared-cpa]

Does anyone know if you can receive your NTS on a Sunday? I am stupid and waited to pay my payment coupon until yesterday so I am anxiously awaiting my NTS so I can schedule for this week!

[Author]

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