[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

[mckan514w]

Spartans92
Okay I THINK because you originally operate under modified accrual when you prepare the statements under accrual you only reconcile the accounts that have been DR/CR under the modified accrual method.

So in the case of the $10,000 principal payment and the $7,500 interest payment… they would not be included on the statement because they are due next year and thus will be an expenditure next year and then appear in that years financial statement….

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

[mckan514w]

LOL thanks guys I actually went with deferred revenues since it had not been earned thus not a part of the Income statement / Net Income…. which would then be added to OCI to get comp income.

I am going to go with the question is “wrong” because “all changes except those resulting from investments by and distributions to owners” so the correct answer can not be Owner contribution without being owner distribution as well right?

I mean Sales Revenue-Expenses=Net income
Net Income + OCI = Comp Income– right???

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

[Just3Letters]

Lawson Corp. uses the cost model for intangible assets. On March 1, Year 1, Lawson acquired intangible assets with an indefinite life for $100,000. On December 31, Year 1, it was determined that the recoverable amount for these intangible assets was $90,000. On December 31, Year 2, it was determined that the intangible assets had a recoverable amount of $94,000. What is the impairment gain or loss recognized in Year 1 and Year 2 on the income statement?

Year 1 Year 2
$10,000 loss $6,000 loss
$10,000 loss $4,000 gain
$10,000 loss $0
$0 $0

I thought it was only under IFRS that you could revalue back up to the original cost???

FAR- 81
REG- 81
BEC- Aug 22, 2016
AUD- TBD

[marqzho]

You got it right 🙂

This is a question about IFRS. GAAP doesn't have cost model

REG 90
FAR 95
AUD 98
BEC 84

[mckan514w]

I was about to ask if this is was an IFRS question — note to myself to make a note card that if question says “cost model” it is IFRS— yet another thing to shove into my brain…. THANKS for pointing that out marqzho

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

[Just3Letters]

Lol that is so tricky! Yeah I definitely need to remember that!

Thanks Marqzho! I just did a set of 100 MCQ with all info so far F1-F5 and got 72%. Progress is happening!

FAR- 81
REG- 81
BEC- Aug 22, 2016
AUD- TBD

[Spartans92]

Just3, is the answer B, 10k loss and 4k gain?

BEC- PASS

[Just3Letters]

@Spartans,

Yeah sorry B is the correct answer!

FAR- 81
REG- 81
BEC- Aug 22, 2016
AUD- TBD

[KJ]

@ just3letters & spartans92..For PV SIM earlier…don't get confused with single sum terminology. You can obtain the same answer by using present value of $1 table. When I did that problem, I am thinking under troubled debt restructure the present value of expected future cash flows will be calculated at contractual effective rate (which was 12% in the problem) and not the rate specified in restructuring agreement (which was 8%). So in a nutshell you can think single sum same as present value of $1. Not sure if it make sense but that's how I look at it. I hope 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

[Spartans92]

Thanks Kanwal! On the side note I gotta applaud those that are taking this exam while working Full time! it is almost 8pm for me and here I am sitting at a bookstore with zero to none motivation as I am BURNED out from studying for last 3 hours or so. Further shows I need to put this exam (as a whole) behind me or at least most parts by the end of this year. I don't know how to deal with studying along with TAX season when I can barely handle classes and the CPA.

BEC- PASS

[KJ]

…on top of that..@Spartan…add family…I have 2 kids and a wife..I have 2 of my first cousins getting married in next 6 months ….and those 2 are like my real brother/sister caz we grew up together…so they said you have to spare one day (wedding day) from your studying (I don't want to miss their wedding anyways)..but its an added pressure. If I pass the first time, I will feel out of the world :-)..I find my motivation from my family who are very supportive and all my CPA candidates from Ninja.

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

[Spartans92]

For sure! With family it is even harder. Especially if you have kids around 2-6 or so because parents should be able to see their kids grow and I totally don't think one would have to drop everything if they have their priorities set right. Nonetheless, it is difficult to balance everything all at once. Good to hear that your family supports you and definitely don't want to miss your cousins' wedding. I would take family over this if anything were to happen..exam can always retake but life is too fragile. Alright, should probably hit the BOOKS!

BEC- PASS

[KJ]

UGGHHH!!! I hate this man!! I am doing a SIM with serial bond using interest method. I calculated one of the carrying value at 19,633 and when I calculated 12/31/Y2 interest expense @ 5% (19,633×5% = 981.65). So I rounded it to 982 but in the answer it said $981. I hope they don't do that in the exam and I get my answer wrong just for doing that 🙁

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

[Just3Letters]

Thanks Kanwal for the help on that PV problem. I finally think I understand it!

Also, I agree that I am in awe of all of you who can handle so many committments (work, family, marriage, etc.) while doing this. I feel like this is a full-time job in itself!

@Kanwal, I need to do some practice with serial bonds! I just know conceptually what they are but i'm never don effective interest or anything with them!

If any of us get a question wrong on the exam because of rounding I am going to fly to wherever the mythical “AICPA” lives and give them a stern talking to lol

but seriously… does anybody know about the rounding thing on CPA? Is there a leniency for like 1 or 2 decimals or anything?

P.S. Just finished watching the F6 pensions lecture… if you're having a good day studying and you feel confident… just go ahead and hit some pensions. That will get rid of that confidence real quick!

FAR- 81
REG- 81
BEC- Aug 22, 2016
AUD- TBD

[Spartans92]

Just3, Glad that we don't need to do a PBO worksheet for it. I was drilled with memorizing the steps of doing one Amortization of PSC etc.. Think that actually paid off. PENSIONS ARE GREAT! – Gearty's voice (for those that uses Becker). 🙂

BEC- PASS

[Author]

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