[jeff]

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

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

[Anonymous]

I'm still harping on this point; it's giving me a lot of grief:

Garcel, Inc. held unfinished inventory at a cost of $85,000 with a sales value of $125,000. The inventory will cost $10,500 to complete. The normal profit margin is 30% of sales. The replacement cost of the inventory was $75,000. What amount should Garcel report as inventory on balance sheet?

A.
$114,500

Incorrect B.
$85,000

C.
$77,000

D.
$75,000

Per Ninja, the correct answer is C. Under the new rules i.e. lower of cost or NRV, shouldn’t the answer be B.?

[GiniC]

@BondVillain –

The “new method” is NOT to always use lower of cost or NRV. You still have to use Lower of Cost or Market when the inventory is maintained via LIFO or Retail method. Since it isn't specified in the problem and they give all the necessary data, it seems they are looking for Lower of Cost or Market.

Cost 85,000
Repl Cost 75,000 LOW
NRV 114,500 (Selling -Cost to Complete/ 125,000 – 10,500) HIGH
Floor 77,000 (NRV – profit/114,500 – (125,000*.3)) MIDDLE = MARKET LESS THAN COST, USE AS LCM

[Stilgoin]

I agree with @bondvillain. Unless it specifies retail or LIFO, the proper treatment is the new method. We cannot infer that it is LIFO or Retail.

https://www.fasb.org/jsp/FASB/Document_C/DocumentPage?cid=1176166207669&acceptedDisclaimer=true

I should add that I think the point was to simplify how we recognize inventory value. If we assume the method is the more complicated way, then that is not the intended result of the rule change.

B | 62, 78
A | 73, 67, 79
R | 82
F | 59, 59, Waiting

Ethics | 93

"Success is not final, failure is not fatal: it is the courage to continue that counts."
~Winston Churchill

“In a world full of critics, be an encourager."

[mcohen1993]

The test should tell you what method the inventory is kept. The reason Becker cost the amount it does it because it keeps up with all the changes. This is a change that takes place January 2017 forward for the exam and they have it in their software. Do not get flustered in the actual exam, put NRV if it is lower than the cost if they are using FIFO.

REG: 91!!
BEC: 80!!
AUD: TBA
FAR: TBA

In the order I plan to take the exams.

[Stilgoin]

@mcohen1993 – Becker has ambiguity just like the others. I know. I have used it.

B | 62, 78
A | 73, 67, 79
R | 82
F | 59, 59, Waiting

Ethics | 93

"Success is not final, failure is not fatal: it is the courage to continue that counts."
~Winston Churchill

“In a world full of critics, be an encourager."

[mcohen1993]

@stilgoin

Let me clarify, the lectures have been updated. In fact, when I was studying they changed the cost method to equity method to be prostpective and NOT retospective in the middle of me studying that chapter.

REG: 91!!
BEC: 80!!
AUD: TBA
FAR: TBA

In the order I plan to take the exams.

[Stilgoin]

And I can confirm Roger and Ninja have been updated as well. 😉 I have seen questions slip through all 3 programs after updates. It is just part of the study process.

B | 62, 78
A | 73, 67, 79
R | 82
F | 59, 59, Waiting

Ethics | 93

"Success is not final, failure is not fatal: it is the courage to continue that counts."
~Winston Churchill

“In a world full of critics, be an encourager."

[Spartans92]

Man Im having such bad luck! nothing related to CPA but I just backed into my garage door without noticing it was still opening now I gotta pay a few hundred bucks to get it fixed. 🙁

BEC- PASS

[mtaylo24]

@scared_cpa nice scores 👍. Don't even bother looking at trending until review phase, use average. I say this because whenever you answer all of the questions correctly one time, your trending will be 100%, then it will begin to adjust afterwards. Keep on plugging away!

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)

[Scared-cpa]

@mtaylo24 So what is a good average score to have then? Do you want average to get to 85? My average scores for each individual section are okay but nothing great. I know I need to get fin statement accts and gov't average percentages up. I'm essentially terrified that I'm going to fail again so I'm trying to figure out if (1) I seem to be prepared enough for Friday and (2) what I need to focus on more.

The sims I have been getting in both ninja and WTB seem easy. I hope my actual sims are like the ones I have been practicing! I just did 6 or 7 and got 100% on all of them with the exception of one at a 91%

[mtaylo24]

^^^^It actually looks like you are there already imho! Keep on doing what you are doing and you should be fine. I think that I was in the low 60s w/ Ninja MCQ when I finally pulled off Reg.

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)

[Scared-cpa]

Thanks, that makes me feel good! I'm hoping I can stay up to par this week with classes starting back. I wish I could've sat before classes started but it wasn't much of an option. I just need to tough it out five more days. I hope and pray I pass.

@mtaylo24 When are you sitting for FAR? Do you know when you will be sitting for BEC? I'm sitting the 20th for FAR and then AUD March 8th. Hopefully that will be enough time. How would you compare AUD to FAR in terms of length of time needed to study and ease of passing compared to FAR?

[Taps731]

Audit is the easiest of the CPA exams. It's by far the most straight-forward exam out there. If you're in school and have never worked in public accounting, then I would recommend about half the time you spent studying for FAR would be needed to study for Audit. If you are currently working in public and you perform audits, you only need a few weeks to study.

Also, taking the exam during school is the best possible thing you can do. Working 9+ hours a day and then coming home to study for 4 or 5 hours each night has made the past year beyond brutal, not to mention the fact that from January 1 to April 15, its impossible to study and/or sit for any exams if you are working through busy season.

[j3cpa]

Hope you guys are studying and understanding the materials!

I'm averaging about 68% on my MCQ test bank right now. Feeling happy about that since I have another month to study.

Anybody has a good explanation on Pensions? APO PBO Pension Costs/Exp etc… Or maybe some journal entries that I can look at? my Wiley book is unbearable…..

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

[mtaylo24]

@scared_cpa I'll be sitting for them towards the end of the window. I've gotten my NTS for FAR, hope to have BEC in the next few days so I can set some dates.

I had different study habits when I struggled and sat for AUDIT, but it is NOTHING compared to FAR. There aren't many calcs at all, but the wording can get tricky at times, and sitting for FAR will definitely help with the Audit sims. As long as you understand the different engagements, IC and evidence, you will be fine. Jan 21-Mar 8 is more than enough time to be prepared!

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)

[Author]

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