[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

[samer]

bonds are INSANE, makes everything else seems easy.

[Incoming91]

For Bonds and leases, I set up an excel table to calc the effective interest. It helped me understand all the components as well as to narrow down what each MC was asking for. Of course you wont have the excel table when you're testing but it worked for me in terms of comprehension.

REG: 80
FAR: 78 (x2)
AUD: 6/10
BEC: 7/20

[Incoming91]

Anyone have any suggestions on how to attack chapter 7 in becker?:

Stockholders equity
Earnings per share (weak)
Statement of Cash flows – (my weakest area of FAR)

Thanks!

REG: 80
FAR: 78 (x2)
AUD: 6/10
BEC: 7/20

[Spartans92]

Think Becker does a great job with F7 especially there was a huge TBS class question on Cash flow. Cash flow will be touched more in government and NFP, concept wise is very similar but different presentation but as long you get F7 those should not be an issue. Best thing is just to hit the MCQ. Post Q's on here and we can help each other out.

for Cash flow I know this may not be a good learning tool but it works for me. Whenever we are computing operating activities under indirect method sometimes you may not get what to add back in or subtract out. I think of it as take out the good things and add back in the bad items. Like add losses, depreciation etc. deduct gains. Other items are just cash to accrual.

BEC- PASS

[Incoming91]

Thanks Spartans!

REG: 80
FAR: 78 (x2)
AUD: 6/10
BEC: 7/20

[samer]

INcoming91: great idea

[Just3Letters]

I pretty much think of operating activities the same way as Spartans does. Noncash expense (add back) Noncash income (i.e. Gain) = Subtract

In other slightly less happy news… I just did one of my 100 MCQ grind sessions and got 72% 🙁 I do these a few times per week as a comprehensive test of everything I have learned.

I have been consistently low 80s until this one I know that my struggle was retaining earlier information (F1,F2,F3,etc.) while learning new stuff. For example, I had completely forgotten to determine the middle market rate for Lower of Cost or Market. Simple things like this can be pass/fail determinations.

Remember to keep reviewing and testing yourself on everything while you are going through new material!

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

[pickanicken]

I'm not sure if the question is allowed, but I am sure it has probably been discussed…

Most practice simulations provide you with the exact number of lines for journal entries and even the position of debits/credits. Is that how the actual exam is also formatted?

REG - 81
BEC - 83
AUD - 86
FAR - 78 (Done!)

[Just3Letters]

Pickanicken, if you have Becker, the simulation introduction video explains a little about that.

There won't always be the exact number of lines needed for J/E. In my experience, many of the simulations also have extra spaces that should not be used if done correctly.

You should expect on the exam that there could very well be extra spaces on some simulations. There will probably also be extra journal entry titles in the drop-down menus that you won't use.

So you will probably have to figure out where the debits and credits are as well as which titles/amounts to use. The only “help” the exam gives you is the drop-down menu for titles. It can be very helpful for example if you forgot that a discount needed to be on the bond issue.

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

[KJ]

@ cultur3…the questions on Partnership were from Ninja MCQ's under Joint Venture.

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

[JT]

OK, I have a question on this Becker example related to the number of months I should count for calculating the payment amount total on 06/30/Y2. I know it is an easy one but regardless I am asking…and here is the problem:

CPA-00477) On January 31, Year 2, Beau Corp. issued $300,000 maturity value, 12% bonds for $300,000 cash. The bonds are dated December 31, Year 1, and mature on December 31, Year 11. Interest will be paid semi-annually on June 30 and December 31. What amount of accrued interest payable should Beau report in its September 30, Year 2 balance sheet?

a. $27,000
b. $24,000
c. $18,000
d. $9,000

I got the correct answer for the accrued interest payable which is $9,000.00; my issue is with the explanation on why the interest paid to date in Year 2 on 06-30th will be $18,000 instead of $15,000 (Choice “c” is incorrect explanation). I thought we had to count the months from the issuance date of the bond, no?

Here is the Becker explanation for all of them:

Choice “d” is correct. Accrued interest payable on September 30, Year 2 is the interest owed since the June 30, Year 2 payment. $300,000 × 12% × 3/12 = $9,000

Choice “c” is incorrect. The $18,000 is the interest paid to date in Year 2, but the question is interest payable at September 30.

Choice “a” is incorrect. The accrued interest payable on September 30 is only the amount since the June 30 payment. The $27,000 is the interest expense through September 30 (from January 1).

Choice “b” is incorrect. The accrued interest payable on September 30 is only the amount since the June 30 payment. The $24,000 is the interest expense from date of issue (January 31) to September 30.

Thanks a bunch!
J.

[cultur3]

That was brutal! No way to prepare for those sims.

F 83 4/09/16
A 85 6/10/16
B 81 7/19/16

[SONA]

Bond dated is counted for the interest. But, when you accrue interest then Issue date is important to count the months from the bond dated.

For example: On July 1, Eagle corp issued 600 of its 10%, $1000 bonds at 99 plus accrued interest bonds dated Apr1, yr1 and mature Apr1, yr11. Interest payable semi-annually on Apr 1 and Oct, 1.

In this case, 3 months interest accrued becoz issued on July 1 but dated Apr1. (there fore Apr, may, june)
Here bond issued and bond dated is important to note.

Because 300000*12/100=36000/12=3000

Therefore, year 2 interest from January to June 30 will be 3000*6=18000.

Make sure you read the dates. It is June 30. (6 month Jan, feb, mar, apr, may, june)

I think that helps.

[Just3Letters]

Nostromo,

You accrue for interest when you have a B/S date BETWEEN interest payment dates or if the bond is issued BETWEEN interest payment dates. .. It you are half way (three months) through a normal semi-annual interest cycle, you should accrue for all interest incurred for the bond regardless of when you obtained the bond (issue date).

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

[Just3Letters]

Hey guys,

quick general question here.

In Becker, there are quite a few simulations that work as “continuing problems”. For example, in the F4 section, the second simulation homework has two separate simulations that are about the same problem. The second simulation derives information from your calculation in the first simulation. The second simulation therefore depends on your correct calculation in the first simulation.

Is that also going to be true on the exam? Or are the 7 sims going to be completely independent of each other?

Thanks!

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

[Author]

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