[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]

@mastump.. I don't think so there will be alternate entry you can show since Machinery is recorded at historical cost (I am not good with JE anyways) but $20,000 discount is actually future interest expense which is the cost associated with paying for the asset and cannot be expensed immediately.

Maybe someone else can shed some light on the JE. Where is Marqzho?? He loves JE.

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

[shakil127]

Can anyone explain me this problem?

Tara Co. owns an office building and leases the offices under a variety of rental agreements involving rent paid in advance monthly or annually. Not all tenants make timely payments of their rent. Tara's balance sheets contained the following data:
Year 1
Year 2
Rent Receivable
$ 9,600
$ 12,400
Unearned Rent
32,000
24,000
During Year 2, Tara received $80,000 cash from tenants. What amount of rental revenue should Tara record for Year 2?
a.
$69,200
b.
$74,800
c.
$85,200
d.
$90,800

answer is d.

BEC-77
AUD-66,72,82
REG-66,64(Q3 2015),80 (11/30/2015)

[Titleistg0lfer]

@shakil127 this is a Cash to Accrual question. Think about these key items and you will always get these right:

Cash to Accrual:
Increase in Assets will Increase Income
Decrease in Assets will Decrease Income
Increase in Liabilities will Decrease Income
Decrease in Liabilities will Increase Income

Accrual to Cash (Opposite)

Since we are going from Cash to Accrual you would:

$80,000 Income from Cash
+ $ 2,800 Increase in Assets (Increase in AR)
+ $ 8,000 Decrease in Liabilities (Decrease in Unearned Rent)
= $90,800

Let me know if that does not make sense.

REG: 84 (10/5/15)
AUD: 83 (11/23/15)
BEC: 77 (2/27/16) - The bubble sucks
FAR: 90 (7/20/16) - AND DONE FOREVER!!!!!

[Anonymous]

@shakil127,

I approached this a little differently.

1. T-account the AR: the net resulting is:

Dr. AR 82,800
Dr. REVENUE 82800

2. T-account Unearned Rent: the net resulting is:

Dr. Unearned Rent 8000
Cr. Rent Revenue 8000

3. Revenue = 82800 + 8000 = 90800

Hope that make sense.

[Titleistg0lfer]

Who else is taking FAR in the next 2 weeks? Also, is this a retake? What are you doing to prepare more?

REG: 84 (10/5/15)
AUD: 83 (11/23/15)
BEC: 77 (2/27/16) - The bubble sucks
FAR: 90 (7/20/16) - AND DONE FOREVER!!!!!

[KJ]

I am taking FAR on 07/18/16 (re-take). I am just re-writing notes, MCQ's, read topic if I don't understand. I am very behind on my studying, so don't know what I am going to do come test day. Maybe re-schedule not sure yet. Also, listening to Audio to/from work.

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

[Anonymous]

I am retaking FAR on 7/12.

Since I am weaker in Sims, I am reviewing and redoing all Sims in Gleim and book every JEs I can, which are pretty comprehensive, and just pound on Ninja MCQs for 2 or 3 sets of 30 a day when I can.

I try to re-write the notes from Ninja Notes to include the explanation from Gleim Sims.

I just hope that is enough for 80.

[Zyx]

An entity authorized 500,000 shares of common stock. At January 1, Year 2, the entity had 110,000 shares of common stock issued and 100,000 shares of common stock outstanding. The entity had the following transactions in Year 2:

March 1 Issued 15,000 shares of common stock
June 1 Resold 2,500 shares of treasury stock
September 1 Completed a 2-for-1 common stock split
What is the total number of shares of common stock that the entity has outstanding at the end of Year 2?

A.117,500

B.230,000

C.235,000

D.250,000

Answer is C. At the beginning of the year, the number of shares outstanding was 100,000:

15,000 new shares were issued, giving a new total of 115,000 outstanding
2,500 of the 10,000 treasury shares were reissued; adding them to the 115,000 gives a new total of 117,500.
A 2-for-1 split doubles the shares outstanding at that point, for a new total of 235,000 (117,500 × 2).

Why 15000 shares is not weighted average??

I'm taking FAR tomorrow, feeling like I know nothing!

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

[Titleistg0lfer]

Your not looking for the Weight Average, that's usually only for EPS calculations. The question is simply asking for outstanding shares:

Total Issued Shares = CS Shares Outstanding + Treasury Stock

So in this case you would calculate as follows:

100,000
+ 15,000
+ 2,500
= 117,500
X 2
= 235,000 Outstanding shares

REG: 84 (10/5/15)
AUD: 83 (11/23/15)
BEC: 77 (2/27/16) - The bubble sucks
FAR: 90 (7/20/16) - AND DONE FOREVER!!!!!

[Zyx]

Titleistg0lfer, thanks lot! I might not survive at my first attempt tomorrow..

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

[Zyx]

A company reported net income available to common stockholders of $2,000,000 for the year ended December 31, year 2. The company had 1,500,000 shares of common stock outstanding as of January 1, year 2, and issued 500,000 additional shares of common stock on May 1, year 2. What amount is the company's basic earnings per share for the year ended December 31, year 2?

A. $1.00
B. $1.09
C. $1.20
D. $1.33

Answer is D. This is EPS, why 500000 issued shared are included and weighted average?

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

[Titleistg0lfer]

Are you sure the answer is D? I am getting B $1.09….unless I am missing something.

REG: 84 (10/5/15)
AUD: 83 (11/23/15)
BEC: 77 (2/27/16) - The bubble sucks
FAR: 90 (7/20/16) - AND DONE FOREVER!!!!!

[Anonymous]

I get 1.09 as well.

[jmc0434]

I agree. I get 1.09 as the Basic EPS. Unless the question actually states May 1, Year 3… I do not know how Basic EPS could be 1.33.

BEC - 79
AUD - 89
REG - 80
FAR - 7/19/16

[Zyx]

I got 1.09 as well. The answer from ninja released FAR questions 2015 said 1.33. I assume 1.33 is not correct then.

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

[Author]

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