[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

[tmclynn]

Can someone help me out with the recency method for accounting for receivables? I have the 2H14 Becker books if someone would just like to point me to where it's described.

Appreciate all the help. Good luck to all studying.

[patelhj1]

Is the F5 section of Becker in particular the Long Term Liabilities and Bonds payable heavily tested?

Its kicking my butt, and can't seem to grasp the concept. I understand the accounting for leases section really well!

Thanks for feedback!

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

Becker with Nonstop NINJA MCQ
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[Spartans92]

F5 is very important I believe. Even during my intermediate class it was heavily covered. Leases and Bonds are very similar because both uses the effective interest method. Takes practice..

My Question is:
Can anyone help me understand the difference between DTL vs DTA. If your taxable income let say Depreciation Expense is a lot higher than your book income. Does this create a DTL. Because you will have a future liability? Vice versa if you have higher expense on book than tax return it is a DTA.. because you are paying taxes for them now and will have a benefit in the future? I am seriously confused, any clarification is appreciated!

BEC- PASS

[kayfcpa16]

@Sparstan92,
Look at it this way:
DTL occurs if taxable income is less than book income today.. you will pay more in taxes next period (A liability)

DTA occurs if taxable income is more than book income today… you will pay less in taxes next period (An asset)

So think about how each element on the income statement affects income and taxes.

If my Depr expense (a deduction in tax) is higher on my tax return than in my accounting record, today I will pay less taxes so that creates a liability because I will have to pay more tax next period. (DTL)

Another example is if I included more income items on my tax return today than I recognized for accounting purposes… next period I will pay a smaller amount in taxes (DTA).. because I already paid my tax for those items.

Hope that helps

FAR - 2/16 - 78
BEC - 2/16 - 78
AUD - 8/16
REG - 8/16

[Spartans92]

Thanks @Kfalicity that does help a little. I consider myself a slow learner so it will prob take some practice to master that. I do have a better understanding on the income part now, the expense part Im still absorbing. Thanks again!

BEC- PASS

[Spartans92]

I think I finally got the DTL and DTA stuff!! I spent literally 2 hours on this section but definitely worth it if I can nail the MCQ.

BEC- PASS

[ecg19]

Taking FAR 5/24. I've watched through all Becker's lectures and feeling a bit overwhelmed. It's such a beast!

Got through F1 and now about to smash out the F2 MC questions. I'm going to spend more time emphasising understanding of the SIMS this time around.

Military spouse living in Germany

REG 1/13/2016 - 82
AUD 1/15/2016 - 82
FAR 5/24/2016 - 80
BEC 5/27/2016 - 85

CA PETH 6/19/2016- 86 BOO
CA PETH 6/21/2016- 90 AND NOW I AM DONE!

[samer]

CPA-00273

Information regarding Stone Co's available-for-sale portfolio of marketable equity securities is as follows:

Aggregate cost as of 12/31/X2 $170,000

Market value as of 12/31/X2 148,000

At December 31, 20X1, Stone reported an unrealized loss of $1,500 to reduce investments to market

value. This was the first such adjustment made by Stone on these types of securities. According to

SFAS No. 115, in its 20X2 statement of comprehensive income, what amount of unrealized loss should

Stone report?

a. $30,000

b. $20,500

c. $22,000

d. $0

The answer is 20,500. But it just doesn't make sense to me.

We have the Marketable securities value on 12/31/y2, thus this amount should have reflected the 1500 loss in year 1! so the amount that should go to OCI Year 2 should be 22,000 to account for the decline in value during year 2?
I am missing something here?
Year 1 value of AFS = 171,500 (1500 loss in Y1 that brings it to 170,000) then another loss in year 2 of 22,000 to bring it to 148,000.

Appreciate any help.

[Nessie]

The difference between the agg. cost and mkt value is $22,000. If you already reported an unrealized loss of $1500, you should report another $20,500 to OCI.

Statement of Shareholder's Equity
AOCI= $22,000

Statements Comprehensive Income
OCI = $20,500

Y1 already accounted for $1500

“Cost” to me equals original cost- not Investment in Investee.
There are 2 GL's (general ledger accounts) in “trading” & “AFS” securities when you start a position:

1) for ORIGINAL COST
2) for VALUATION ACCOUNT

The question is asking for about the original cost account, not the valuation account.

I think you made an easy question seem more difficult. 🙂

REG Aug 20/15: 88
AUD: Feb 29/16: 80
FAR: Jun 10/16: 80
BEC?

Becker self-study, Becker Final Review & NINJA MCQS

[marqzho]

Think about the flow of the J/E, let say all purchases are made in Year 1 for this asset.

Cost = $170000

Dr. AFS 170000
Cr. Cash 170000

Year 1
Dr. OCI 1500
Cr. AFS 1500 (Mkt Value = 168500)

Year 2
Dr. AFS 20500 (Mkt Value = 148000)
Cr. OCI 20500

REG 90
FAR 95
AUD 98
BEC 84

[nib]

repost

hello friends,

QUE

What is the effect on retained earnings when a non-monetary asset is distributed to a shareholder?
R/e will increase or decrease and by what amount ?

1)also check J/E given below , If corect or not .???

——————————————————
Property Dividend JOURNAL ENTRIES

date of dividend declaration

Dr nonmonetary asset diff ( f.v. – c.v.)
cr Gain on appreciation of nonmonetary asset( fv- cv )

Dr R/E f.v. of asset .
Cr Dividends payable fv of asset

On the dividend payment date,:
Debit Dividends payable f.v. of asset
cr nonmonetary asset f.v.
–

[samer]

@Nessie Yeah you are right 🙂 I tend not to believe it when I see such a straight forward question.
I missed the valuation account.
thanks a lot.

[samer]

@marqzho
I missed the valuation account (I thought that the 170,000 already accounted for the 1,500 decline in value).
that straight things up.

Thank you.

[Excel14]

I have a question related to marketable securities, coming from Gleim. I won't copy and paste here, but it basically asks about a an unrealized holding loss, when transferring from “trading” to “available for sale” securities. If the reclassifIcation happened at Dec 31, Yr 1, at the same date we make our first evaluation of FV, how can we assume that the loss in this case has “already been accounted for in earnings”? We have basically done nothing until we reach Dec 31, which is why I felt we would recognize “zero” in the income statement, and upon analysis of FV at Dec 31, Yr 1, stick the unrealized holding loss in OCI. Gleim states that at the transfer date we assume it was taken care of in earnings, but how can we do that, when we made no entries before now (except when purchased at cost)?

BEC (2/28/16) ----- 78
FAR (09/10/16)-----
AUD
REG

CIA, CGAP, CFE

[Nessie]

Excel,
If you post the question, I might be able to figure it out.

REG Aug 20/15: 88
AUD: Feb 29/16: 80
FAR: Jun 10/16: 80
BEC?

Becker self-study, Becker Final Review & NINJA MCQS

[Author]

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