[jeff]

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

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

[mtaylo24]

Ch 14 for Gleim (Stockholder's Equity/Partnerships) is a slow grind man! Been stuck on this chapter for days. If you have Gleim, do not study ch 12 (bonds), 13 (leases), and 14 (equity) back to back to back.

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]

Hey can anyone help explain the correct answer to this question for me. Ninja MCQ FAR 1311 Category: 5A2 Statement of Activities

Cancer Educators, a not-for-profit entity, incurred costs of $10,000 when it combined program functions with significant fundraising functions. Which of the following cost allocations might Cancer report in its statement of activities?

A. Program services: $0; Fundraising: $0; General services: $10,000
B. Program services: $0; Fundraising: $6,000; General services: $4,000
C. Program services: $6,000; Fundraising: $4,000; General services: $0
D. Program services: $10,000; Fundraising: $0; General services: $0

Answer is C.
Explanation: FASB ASC 958-720-45-29 through 45-37 states that joint costs should be allocated between fundraising and the appropriate program or management and general function if three criteria are met. Otherwise, all of the joint costs should be considered fundraising costs (not one of the answer choices given). The criteria are purpose, audience, and content. The purpose of the joint activity must include accomplishing program or management and general functions, with a specific activity by the audience and a specific activity by the recipient to that end. If the criteria are not met, all the costs are considered fundraising costs. Fundraising activities that are incidental to program or management and general activities would not require all costs to be considered fundraising costs or to be allocated.

So I can understand allocating the joint costs and all but what I don't understand is how they get the 60/40 split in the funds?

[Operation_CPA]

@scared_cpa

They split between program services and fundraising services, thats all that you have to know. The 60/40 split is somewhat irrelevant and more of a “theoretical” scenario of how the allocation might be presented (as seen in the question).

[yazoon81]

@AR

You have to differentiate between (Transaction has commercial substance) & (Those which lacks commercial substance) on non-monetary exchange.

1- Transaction has commercial substance: Gain is recognized regardless of boots received or given.

2- Transactions lacks commercial substance: Gain is recognized only if boot received.

Hope that this will help you.

Thanks

[Scared-cpa]

@Operation_CPA Okay, gotcha! Thanks for the response! Good luck with your exam 🙂

[AR]

@yazoon81

Got it, thank you.

[mtaylo24]

Anybody have a cheat for the statement of cash flows?

What falls into each category (operating, investing, and financing)?

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)

[007]

@mtaylo24

Will this work for you?

[mtaylo24]

@007, Can't see…the link is broke.

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)

[Josh]

@007 Thanks, I sped through Cash Flows yesterday and Governmental and NFP today. That's a cool sheet! I'll be sure to use it now.

@mtaylo24 How was your trip? 7 study units in 2 days mainly using notes. The slowest part for me was watching Gleim Instruct. I told my personal counselors when I was taking AUD, I try to get creative with lectures like watch them while playing with my daughter or eating. Sitting and watching even with my book knocks me out every time (Ninja's lectures are better especially while taking notes). tko today with Governmental Reporting, and those aren't as bad as most units.

@stillgoin Depends on the day, and my motivation how many MCQ's I do. I think part of what helps is my daily 5 question mini-sessions in AUD and FAR. When I slack on using that “other” testbank, I slow down on the harder questions like those in Gleim. The “other”s are more conceptual, not so deep calculations. Everything's useful though.

Up all night in Test Prep tonight especially in my weaker areas as I get ready for overnights again. I didn't expect to have this much free time. Strep has given me a little time for New Years. My final review will be tighter going back to work, but a week is not too bad. I know I need to spend more time with the book like I've done in the past, but not cover-to-cover like I've done before, just the “drilling down” into the weakest areas. If I get through the adaptive part of Gleim, I'll probably go for another testbank. I know I got a lot to do.

Think I'll start this final review with my AICPA Sample Test. I tend to say too much when I've had a lot of coffee, but the other side of it's stimulation is anxiety. I'll see if I find anything useful while I'm at this. Happy New Year!

[mtaylo24]

@jalls…It was good man, but the tourist and traffic in Orlando are str8 savage. Been hammering Gleim hard myself the last 48 hrs, I will wrap up the second half of the book by tomorrow. I started with the back of the book this go-round, since I slacked hard on it for my last fail. I didn't buy the premium version so I am stuck with the audiovisual slides instead of the lectures. Been doing like a subunit a day in its entirety for my “learning phase”, cant wait to get passed this and start working multiple units for my review. Still no test date!

@007, i figured out your link. Thanks man!

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)

[mtaylo24]

OK, I think I'm good w/ what goes where. I still get confused w/ increases and decreases though…Like below, I thought the answer is A to subtract (incr in inv and decr in A/P), but its D to add. I may be having a reading comprehension issue…

Duke Co. reported cost of goods sold of $270,000 for the current year. Additional information is as follows:

December 31 – January 1

Inventory: $60,000 – $45,000
Accounts payable: 26,000 – 39,000

If Duke uses the direct method, what amount should Duke report as cash paid to suppliers in its current year statement of cash flows?

A. $242,000
B. $268,000
C. $272,000
D. $298,000

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)

[Stilgoin]

@mtaylo24 Here is a mneumonic-

Investing makes me HAPPEE
HTM
AFS
Property
Plant
Equipment
Equity

Financing Princ DivITS
Principles on loans
Dividends
Issuing Stock
Treasury Stock

Everything else is operating, including interest on loans.

The way I remember Accrual to Cash is Accrual minus A/R plus A/P because A is before C, and M is before P. Then the opposite for Cash to Accrual. On your question, you would add a decrease in inventory and add an increase in accounts payable. The dates seem a little ambiguous.

Hope this helps. I have crazy memory tools. lol

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]

@mtaylo, The direct method is actually easier in my opinion. Try to write the JE out. so in your question we have
DR: COGS 270k
DR: Inventory 15k
DR: AP 13k
CR: Cash (plug figure) 298k

Or think logically how every scenario affects cash. we know inventory went up so that means we paid more cash to buy.. outflow of cash. AP went down so we paid our liabilities or bills whatever u wanna say. Thats also cash outflow. So you add 13 + 15 both outflow of cash to COGS 270. Thats your total outflow to pay suppliers.

For indirect now, I tend to memorize add back the bad stuff and take out the good stuff. For example, Increase in Inventory is good so I would subtract out from operating activities if it was under indirect method to arrive at NI.
Or I think Becker gives a good short cut: Debit Balances are ALWAYS opposite.. For example: increase in AR (DR balance normally) is a subtraction out of operations.. Credit Balances are the same. Decrease in AP is a subtraction. This only applies to Indirect method tho. Hope it helps.

BEC- PASS

[Stilgoin]

I should have said – add an INCREASE in inventory and add a decrease in A/P. Sorry- I can’t edit.

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."

[Author]

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