FAR Study Group Q2 2016 - Page 153

  • This topic has 2,358 replies, 134 voices, and was last updated 9 years ago by lolo.
Viewing 15 replies - 2,281 through 2,295 (of 2,358 total)
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  • #765951
    mtaylo24
    Participant

    @Operation_CPA – This will be my first swing at it. I don't plan to sit until the extended window though. What materials are you using? I'm rolling with Gleim.

    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)

    #765952
    jpn264
    Participant

    took AUD last summer and didn't pass and took a year off to finish my MS. studying for FAR, taking it in october and just really struggling. any suggestions? using becker (paid for by my employer) and just feeling really overwhelmed and 0 confidence.

    #765953
    Operation_CPA
    Participant

    @mtaylor

    Currently using Becker and supplementing with NINJA Notes!

    @jpn264

    Honestly, FAR is a grind. Things come full circle over time though, I will say. My best advice is try not to get too caught up in the small details. One of the things I wish I did my first time studying FAR was keep a log of everything I got wrong. When you get something wrong, write it down or take notes in a word doc. Use the bullet points as fact nuggets this way you are less likely to make the same mistake again.

    #765954
    Anonymous
    Inactive

    i just found out about the existence of DRS and that they are debuting starting July 2016. So i took FAR this past window and i realize one of my sims was a DRS. so im guessing that was a pretest question, which is a bummer since i thought it was one of the few sims i did well on. was counting on that one to boost my points

    #765955
    FUBARFAR
    Participant

    Hey guys, I have the following question. I tried doing journal entries, but I'm not getting the same answer and the explanation isn't making much sense. Can anyone make light of this problem?

    Kuchman Kookware issued 40,000 shares of its $8.00 par value common stock for $9 on January 1, Year 1. Kuchman repurchased 1,000 shares at $8 per share on April 1, Year 2, resold 500 shares at $9 per share on July 1, Year 2, and, on October 1, Year 2, resold the final 500 shares at $5 per share. Assuming Kuchman uses the par value method of accounting for its treasury stock, retained earnings at December 31. Year 2 would be reduced by:
    a. $1,000
    b. $0
    c. $500
    d. $1,500
    Explanation
    Choice “c” is correct. Using the par value method, the company effectively retires reacquired stock at the time of repurchase and accounts for any gain through Additional Paid-in Capital–Treasury Stock and any loss through retained earnings. Resale of stock above par results in elimination of the related treasury stock amount and in the recording of Additional Paid-in Capital. Resale of stock significantly below par results in recording a loss in retained earnings to the extent the loss exceeds the previously recorded Additional Paid-in Capital–Treasury Stock.

    FAR - 7/19/2016 - 83
    BEC - 8/30/2016
    AUD - TBD
    REG - TBD

    #765956
    Anonymous
    Inactive

    FUBARFAR, I am lost as well on your question. My answer would have been (A – $1,000)

    4/2/x2 repurchase T/S
    D T/S (1,000 * 8) 8K
    C Cash 8K

    7/1/x2 Resold T/S
    D Cash (500 * 9) 4,500
    C T/S (500 * 8) 4,000
    C APIC – T/S 500

    So, I am not sure why RE is $500 instead of $1k

    Anyone can explain? Tx

    Dlu

    10/1/x2 Resold T/S
    D Cash (500 * 5) 2,500
    D APIC – T/S 500
    D R/E 1,000
    C T/S (500 * 8) 4,000

    #765957
    gennatay
    Participant

    Does anyone know why this was divided by “3” instead of “12” to find the weighted average?

    Pubco is a public company that uses a calendar year and has a complex capital structure.
    The average market price of Pubco’s common stock for the first quarter was $25, the shares outstanding at the beginning of the period equaled 300,000, and 12,000 shares were issued on March 1.
    At the beginning of the quarter, Pubco had outstanding $2 million of 5% convertible bonds, with each $1,000 bond convertible into 10 shares of common stock. No bonds were converted.
    At the beginning of the quarter, Pubco also had outstanding 120,000 shares of preferred stock paying a quarterly dividend of $.10 per share and convertible to common stock on a one-to-one basis. Holders of 60,000 shares of preferred stock exercised their conversion privilege on February 1.
    Throughout the first quarter, warrants to buy 50,000 shares of Pubco’s common stock for $28 per share were outstanding but unexercised.
    The weighted-average number of shares outstanding used to calculate Pubco’s basic earnings per share (BEPS) amounts for the first quarter is

    A. 444,000
    B. 372,000
    C. 344,000
    Answer (C) is correct.
    The number of shares outstanding at January 1 was 300,000, 12,000 shares were issued on March 1, and 60,000 shares of preferred stock were converted to 60,000 shares of common stock on February 1. Thus, the weighted-average number of shares used to calculate BEPS amounts for the first quarter is 344,000 {300,000 + [12,000 × (1 ÷ 3)] + [60,000 × (2 ÷ 3)]}.
    D. 300,000

    #765958
    Operation_CPA
    Participant

    On December 31, an entity tested its goodwill for impairment and determined the following for one of its cash-generating units:

    Carrying value $ 1,015,000
    Fair value less costs to sell 955,000

    The entity also determined that the present value of the future cash flows expected from the cash generating unit is $940,000. The cash generating unit reports goodwill of $130,000. What is the goodwill impairment loss that will be reported on the December 31 income statement under IFRS?

    Really simple question here – I got the answer of 60,000 but why is the 130,000 goodwill ignored and not making it 70,000 (one of the other answer choices) is that just to try to throw you off?

    #765959
    KJ
    Participant

    @Genna..if I'm not wrong is because question is only asking for 1st quarter not year end.

    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

    #765960
    gennatay
    Participant

    @kanwal78 Thanks! I wasnt sure abou that part.

    #765961
    KJ
    Participant

    @ Operation…Under IFRS, if asset CV is more than the recoverable amount the asset is impaired and is charged against the current period profit or loss (income statement). The question is asking what amount will be reported in Income statement. This will be using cost method. If it was reevaluation method was used then you will include gain/loss in OCI. The key difference is question asking for reporting loss either in Income Statement or OCI.

    I am bad at explaining but hopefully this helps.

    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

    #765962
    Zyx
    Participant

    FUBARFAR & DLu; If I'm not wrong the relevance info is below; the info given before that incurred in year1 which is not included in year 2, so disregard that.

    Kuchman repurchased 1,000 shares at $8 per share on April 1, Year 2, resold 500 shares at $9 per share on July 1, Year 2, and, on October 1, Year 2, resold the final 500 shares at $5 per share. Assuming Kuchman uses the par value method of accounting for its treasury stock, retained earnings at December 31. Year 2 would be reduced by:

    JEs

    common stock $8,000 (1000 shares * $8 par value) -repurchased 1,000 shares at $8 per share
    Cash $8,000
    Cash $4,500 -resold 500 shares at $9, par value $8
    common stock $4,000
    paid in capital $500
    Cash $2,500 -resold 500 shares at $5, par value $8
    paid in capital $500
    retained earning $1,000
    common stock $4,000

    From above, paid in capital reduces $500

    REG: 77 x2
    BEC: 81 x3
    FAR: 68 retake 10/1
    AUD: 8/27

    #765963
    KJ
    Participant

    The following information pertains to Gali Co.'s defined benefit pension plan for 20X1:

    Fair value of plan assets (beginning of year) $350,000
    Fair value of plan assets (end of year) 525,000
    Employer contributions 110,000
    Benefits paid 85,000

    What is Gali's actual return on plan assets?

    A.
    $65,000

    B.
    $150,000

    C.
    $175,000

    D.
    $260,000

    I thought this was the formula for actual return on plan assets but according to this none of the above choices are correct.

    (End Year Plan assets – Beg. Year Plan assets) + (Contributions – Benefits Paid)

    The Correct answer is B which will make it true if the formula was

    (End Year Plan assets – Beg. Year Plan assets) – (Contributions – Benefits Paid)

    I am confused, can someone please explain?

    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

    #765964
    Anonymous
    Inactive

    kanwal78, How about this:

    Beg: 350
    + Contribution: + 110
    – Paid : – 85
    Subtotal: 375

    Return?

    Ending: 525

    Subtotal + R = Ending
    375 + R = 525

    Return = 150

    #765965
    Anonymous
    Inactive

    zyx11, but the question is asking for R/E @ 12/31/x2

    So, based on the math and JE that I did using Par method, R/E is Dr. for $1k. But the answer is $500.

    That is what I don't get.

    Dlu

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