[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]

A C????– ha ha ha– i feel like I've never studied so hard to get an F– Welcome back Kanwal and thanks for the above JE

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

[Incoming91]

Anyone fully understand monetary and non monetary assets and liabilities or have a good way of understanding/memorizing this?

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

[mckan514w]

Don't fully understand it but simplified
Assets:
Monetary equals fixed price/ non-monetary equals not fixed… so for example inventory prices fluctuate so it is not fixed thus non-monetary…

Liabilities
Any liability that you will not pay out A fixed amount of cash for is non-monetary-

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

[Incoming91]

Thanks mckan514w that helps!

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

[Claudia408]

Carlson City's fiscal year ends December 31. On August 1, the city issued a purchase order for new vehicles to be delivered at the rate of two per month beginning October 15. Twelve vehicles were delivered as scheduled and payments of $264,000 were made upon delivery. If these were the only transactions made by the city, which of the following balances would appear on the balance sheet as of December 31?

I thought the entry here would be:
Dr Reserve for Encumbrance/Fund Balance (According to Wiley either could be used)
Cr Encumbrance

But the answer is:
Dr. Fund Balance
Cr. Reserve for Encumbrance

Is Encumbrance and Reserve for Encumbrance the same thing?

BEC - 75 (3x)
AUD - 78 (3x)
REG - 67, 66, Aug 1
FAR - 54, Sept 8

[mckan514w]

Okay this one almost sent me out to kill someone yesterday– its all in the wording:

Aug 1 issued the purchase order for 2 a month for a total of 12 beginning in October….. NOT 12 were delivered in October… so by December you have only gotten 3 months worth of vehicles or 6 vehicles… leaving 6 still left to be delivered:

Aug JE
Encumbrances 264
Reserve for Encumbrance 264

December:
Reserved for Encumbrances 132
Encumbrances 132
(to account for the 6 vehicles you got)

Fund Balance 132
Reserved for Encumbrances 132
To close out for the year reserving the remaining money for the 6 you will get next year

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

[Spartans92]

mckan, so would budgetary control account work?

BEC- PASS

[Claudia408]

mckan514w – thanks for that… so i guess if all vehicles came in before the end of the year, that last entry would not be needed? the 2nd entry you listed would be for the entire amount and that's basically closing it out?

BEC - 75 (3x)
AUD - 78 (3x)
REG - 67, 66, Aug 1
FAR - 54, Sept 8

[mckan514w]

@Spartan- I don't think the budgetary control account would work as an end entry because I **THINK*** it is a temporary account to hold that years entires so everything needs to be closed out to the fund balance which would be reported– (don't hold me to this answer)

@claudia yes! because there would not be anything left to “account for” in the encumbrances they all came in so you close it out and then record the purchases

Vouchers Payable XXX
Cash xxx

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

[Spartans92]

Thanks I see what you are saying now. Budgetary wouldn't work haha. don't know what I was thinking.

BEC- PASS

[mckan514w]

Bond Commission cost?? recorded separately or is is deducted out of carry value of bonds payable?

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

[Claudia408]

is this for bond issuance?

Dr cash
Dr Bond Issuance Cost (BIC)
Dr Discount *
Cr Bond payable
Cr Accrued Int
Cr Premium *

Reverse entry for retirement

BEC - 75 (3x)
AUD - 78 (3x)
REG - 67, 66, Aug 1
FAR - 54, Sept 8

[mckan514w]

yes- Claudia so say you issued at 1,000 par value bond at 98 and paid a $10 underwriting fee…

would your bonds payable be 1,000
or would the by 90? (net of underwriting)

I can not think today my brain is getting really confused ….

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

[Spartans92]

If I remember correctly your underwriting fees should be included in your cost. Haven't gotten back to that part yet. Theres also registration, accounting, and all sorts of other fees.

BEC- PASS

[marqzho]

mckan514w

remember this one :
Bond Payable always equal the face value of the Bond

REG 90
FAR 95
AUD 98
BEC 84

[Author]

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