[jeff]

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

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

[Spartans92]

Got a bond question as well for y'all.
On April 1, Year 1, Ward Corp. issued $750,000 of 10% nonconvertible bonds at 102 that are due on March 31, Year 11. Each $1,000 bond was issued with 40 detachable stock warrants, each of which entitled the bondholder to purchase one share of Ward $10 par common stock for $25. On April 1, Year 1, the market value of Ward's common stock was $20 per share, and the market value of each warrant was $4. What amount of the proceeds from the bond issue should Ward record as an increase in stockholders' equity?

a.
$300,000
b.
$120,000
c.
$15,000
d.
$750,000

@jalls, is it B by any chance?

BEC- PASS

[Spartans92]

I can't make Bonds sink in even after the Roger videos.. While watching its very easy to follow and understand roger but then when I turn to becker. 90% of the time its like a foreign language. Very discouraging because I should be on Govt now but instead I'm like 3 chapters behind for this dang topic.

BEC- PASS

[GiniC]

Thanks @mtaylo24 – it was one little word again – Monthly. I was doing all the calculations correctly but using each amount as the lease for the YEAR, not the month. With no idea of scale, it didn't occur to me that the monthly rental I derived was too small. Rent for a single office in a large building, just to have a local presence (my company does that in some locations) would be that low.

[mckan514w]

Hope everyone had a happy FAR holiday… family just left so I am back at it after about a week off…. ugh. ready to be done 🙁

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

[Stilgoin]

My focus is 💩. I can’t seem to get through 3 questions without stopping. I took off 3 days and the guilt is insane! Must.Get.Through.FAR.To.Finish. 🙁

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."

[Operation_CPA]

@Spartans92

For bond questions with warrants I always look for a few things: Are you going to have to use the warrants only method or the market value method. In this particular problem we are only given the FV of the warrants, therefore, we use the warrants only method.

JE's that I use to help me solve the problem:

DR: Cash 765,000 <—- 750,000 @ 102 (step 1)
DR: Discount 105,000 (step 4 – plug)**

…………….CR:B/P 750,000 (face of the bond) (step 2)
…………….CR:APIC – warrants 120,000 (Step 3)*

*there are 750 bonds and each bond has 40 detachable warrants (750 * 40) = 30,000. Each warrant has a market value of $4.00. So 30,000 warrants x 4 = 120,000

** the discount or premium I always do last, its a plug figure.

The answer should be B. Honestly bonds are intimidating but once you understand the bond amortization table and the JE's, answers will fall into your lap. Keep pushing guys.

[mtaylo24]

I'm about to take a break myself and I'm already feeling guilty. Well not really a full break, I should have time to study on the side but the exam won't be my priority again until Saturday.

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)

[Operation_CPA]

@Spartans92 (For some reason my post just disappeared…so I will try again)

For bond questions with warrants I always look out for a few things: Are you going to have to use the warrants only method or the market value method? In this particular problem, we are only given the FV of the warrants. Therefore, we use the warrants only method.

JE's that I use to help me solve this problem:

DR: Cash …..765,000 <— 750,000 @ 102 (STEP 1)
DR: Discount..105,000 (STEP 4 <– this is a plug, I always do this last)

……………….CR: B/P ………….750,000 (STEP 2)
……………….CR: APIC – warrants..120,000 (STEP 3)*

*There are 750 bonds and each bond has 40 detachable warrants (750 x 40) = 30,000 warrants. Now, each warrant has a market value of $4.00. So 30,000 warrants x $4.00 = $120,000.

The answer should be B. Honestly bonds are intimidating, but once you understand the bond amortization table and the JE's, answers will fall in to your lap. Keep pushing guys.

[Mscfisher]

@jalls..not sure if anyone answered as yet but I am going with B.19,350

Cash 33,750 (because $75 plus 1 warrant gives you 1 share and 90% of 500 warrants exercised)
A.P.I.C- warrants 3,600
common stock 18,000
A.P.I.C 19,350

[A1lessio]

For you Becker users how do you feel about skipping F10? I can't watch any more lectures or retain anything else. I have this whole week off and would like to kick off the review process now. The exam date is Jan 20th.

AUD (08/02/2016)

[Operation_CPA]

@A1lessio

After having taken FAR twice, I highly recommend not skipping anything. Every exam is entirely unique and not studying any random chapter could be the difference between passing and failing.

[jeff]

Test Your Might (AUD) – MCQ Giveaway on Facebook

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

[mckan514w]

finally got my NTS for my re-take and now just feel stalled out on when to schedule it… there aren't a lot of open dates so I am either looking at Mid-January or Late February… I feel like Mid Jan is too soon but Late Feb too long… any helpful words of scheduling wisdom????

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

[Mscfisher]

@mckan. I am shooting for first week of February. Before the 14 so that i can get my score asap. January is basically here and i want be over prepared. What material are u using. Willey test bank was great for me for reg. All i have now is Becker any suggestions?

[mckan514w]

First week of Feb would be ideal for me MScfisher but only date available then is one that starts at 1:30pm- I am much more of a morning person so I know that if I try to sit that late in the day I am just setting myself up for failure 🙁

I am using Gleim this go round along with my Ninja until it expires in about 2 weeks.

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

[Author]

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