[jeff]

Welcome to the Q2 2016 CPA Exam Study Group for FAR.

Some BLITZ videos to help your exams: https://www.another71.com/ninja-blitz

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

[KJ]

Example of forgetting the stuff….I posted question earlier on this page (44) about bond issuance cost if they are still amortized or we reduce from carrying amount. I shouldn't be asking this question when I am only 6 days from my exam, ugghhhhh!!

FAR - August 2016
AUD - September 2016
REG - October 2016
BEC - November 2016

Remember: "Everything should be made as simple as possible, but not simpler." - Albert Einstein

[MaLoTu]

crunchtime and kanwal – with LCM you use the lower of cost or market. In this one we use 75 because it is lower than the original cost of 85. Then we choose the middle which ended up being the market floor of 77. We cannot choose replacement of 75 because it is below the market floor, which I interpret to mean that it will more than likely sell for more than what we can replace it at and therefore doesn't violate the rule of conservatism. Does that make sense? the original cost (85) isnt a factor as it was ruled because it was higher than replacement.

The three values are (1) Market Ceiling,(2) Market Floor, and the (3) lower of Original Cost or Current Replacement.

[MaLoTu]

@Dab, I am using Becker but may pick up the NINJA MCQ if I push back my exam, which I likely will because I don't need to leave time on the table.

[KJ]

On January 1, year 1, Boston Group issued $100,000 par value, 5% five-year bonds when the market rate of interest was 8%. Interest is payable annually on December 31. The following present value information is available:
5%
Present value of $1 (n = 5) 0.78353
Present value of an ordinary annuity (n = 5) 4.32948
8%
Present value of $1 (n = 5) 0.68058
Present value of an ordinary annuity (n = 5) 3.99271

What amount is the value of net bonds payable at the end of year 1?
$88,022
$90,064
$100,000
$110,638

FAR - August 2016
AUD - September 2016
REG - October 2016
BEC - November 2016

Remember: "Everything should be made as simple as possible, but not simpler." - Albert Einstein

[patelhj1]

@Kanwal Answers is $90,064.

FV Bond = PV of future interest payments (Market Rate) + PV of Principal (Market Rate)

PV of Interest Payments = (100,000*.05) * 3.99271 = 19,964
PV of Principal = 100,000 * .68058 = 68,058

FV Bond = 19,964 + 68,058 = 88,022 Net Carrying Value as of Jan 1, 1.

88,022 * .08 = 7,041 NCV * Effective (Market Rate)
100,000 * .05 = 5,000 Face * Coupon
Difference = Amortization 2,041
Amortization + NCV = End Value
2,041 + 88,022 = 90,063

Let me know if your confused

BEC 78 08/2015
REG 71 11/2015, RETAKE 83 01/2016
FAR 75! 5/2016
AUD ? 8/2016

Becker with Nonstop NINJA MCQ
Google most difficult professional exam

[patelhj1]

@MaLoTu All this rescheduling is making we reconsider… Im scheduled for Wednesday but I just checked prometric and they have a few spots open in June for me …. Hmmmmm

BEC 78 08/2015
REG 71 11/2015, RETAKE 83 01/2016
FAR 75! 5/2016
AUD ? 8/2016

Becker with Nonstop NINJA MCQ
Google most difficult professional exam

[patelhj1]

@MaLoTu All this rescheduling is making me reconsider… Im scheduled for Wednesday but I just checked prometric and they have a few spots open in June for me …. Hmmmmm

BEC 78 08/2015
REG 71 11/2015, RETAKE 83 01/2016
FAR 75! 5/2016
AUD ? 8/2016

Becker with Nonstop NINJA MCQ
Google most difficult professional exam

[KJ]

Thanks Patel, I was confused but you made it clear. I forgot about amortization, uggghhh but thanks for the clarification.

FAR - August 2016
AUD - September 2016
REG - October 2016
BEC - November 2016

Remember: "Everything should be made as simple as possible, but not simpler." - Albert Einstein

[KJ]

I just wanted to know for this bond conversion question if I am doing correct J/E to solve it, the JE will be:

Dr Bonds Payable 775,000
Cr Discount on BP 23,000
Cr Common Stock 450,000
Cr APIC – CS 302,000

Bondholders of Balm Co. converted their bonds into 90,000 shares of $5 par value common stock. In their accounting records, bonds had par value of $775,000 and unamortized discount of $23,000 at the time of conversion. What amount of APIC from conversion should Balm record?

FAR - August 2016
AUD - September 2016
REG - October 2016
BEC - November 2016

Remember: "Everything should be made as simple as possible, but not simpler." - Albert Einstein

[patelhj1]

@Kanwal Looks correct to me!

BEC 78 08/2015
REG 71 11/2015, RETAKE 83 01/2016
FAR 75! 5/2016
AUD ? 8/2016

Becker with Nonstop NINJA MCQ
Google most difficult professional exam

[MaLoTu]

I rescheduled for June 8 … I don't see a benefit of leaving time on the table. I will take my time and make sure I know as much as I can. I will never know everything!

[patelhj1]

@MaLoTu – I might be on the same boat as well… I'm gonna sleep on it tonight and consider it tomorrow. One part of me just wants to take it and get over with it but another part telling me take the time to study and master the concepts rather than waiting an entire testing window and having retake

BEC 78 08/2015
REG 71 11/2015, RETAKE 83 01/2016
FAR 75! 5/2016
AUD ? 8/2016

Becker with Nonstop NINJA MCQ
Google most difficult professional exam

[MaLoTu]

Patel, if you can get 5/31, that would be the best because then your score release would be June 9. June1-10 get their scores on June 21 =( I changed it also because I didn't want to wait 20 days for my score, lol.

It is a good idea to sleep on it. I totally understand the sentiment of just wanting to take it.

I am still trying to get through NFP accounting. It was my goal to finish this weekend. I guess I will just stay up late and get it out of the way!

How did your studying go this weekend?

[KJ]

Thanks Patel!!

FAR - August 2016
AUD - September 2016
REG - October 2016
BEC - November 2016

Remember: "Everything should be made as simple as possible, but not simpler." - Albert Einstein

[patelhj1]

MaLoTu, I'm doing F9 Gov't Part B, Becker MCQ right now. I still need reread and do all NFP questions.

Its gonna be a long night. I'm not even sure if I can complete all the becker SIMS in one day. That was the original plan do you think its possible?

BEC 78 08/2015
REG 71 11/2015, RETAKE 83 01/2016
FAR 75! 5/2016
AUD ? 8/2016

Becker with Nonstop NINJA MCQ
Google most difficult professional exam

[Author]

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