[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]

Thanks just3letters!

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

[KJ]

Thanks just3letters!

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

[KJ]

@ just3letters….Answer is 45K. Gain on sale will be taxable in future not a deduction. Its a deferred liability on temporary difference (If deduction in current , its taxable in future).

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]

@just3, everything we need is pretty much given in the facts. It stated it is a DTL and since DTL means lower taxes this year and higher in future we have to use the future tax rate…150k * .30 = 45k.. B? right? Or you could see it says the gain was not reported in the taxable income hence we don't pay NOW but we pay more in FUTURE.

BEC- PASS

[Spartans92]

Best way is not to overthink the question and go with the facts given.

BEC- PASS

[Spartans92]

Neron Co. has two derivatives related to two different financial instruments, instrument A and instrument B, both of which are debt instruments. The derivative related to instrument A is a fair value hedge, and the derivative related to instrument B is a cash flow hedge. Neron experienced gains in the value of instruments A and B due to a change in interest rates. Which of the gains should be reported by Neron in its income statement?

How do I even know if instrument B is effective or ineffective? In the answer it says assume to the extent of effective which goes into OCI..I understand but I just don't get why they say assume. I can't assume come test day. Anyone clarify this?

BEC- PASS

[Credit Revenue]

For this one you are assuming effective as given. I don't think you will get a derivative question asking to calculate the effective and ineffective portion. If you did…you would have numbers and so forth. It's a real long shot though.
Just know how to handle both portions.

A - 79 expires 4/30/16 need a pass on REG
B - 78
F - 80
R - 83!!! Can live again!

[Spartans92]

Thanks Credit! Are you taking FAR this quarter too? Just wondering. If so, Good Luck!

BEC- PASS

[Credit Revenue]

REG on 4/30. I took FAR 4/7… Just wasting time on another71 and doing MCQ's slowly. Calling it a night soon. So I am giving you advice and I might have failed. lol

A - 79 expires 4/30/16 need a pass on REG
B - 78
F - 80
R - 83!!! Can live again!

[Spartans92]

Woah, that is crazy how you schedule REG right after FAR in same month. I definitely won't be able to knock those two out with only 3 weeks in between. Be positive! Have a great night.

BEC- PASS

[Credit Revenue]

I lose Audit on 4/30. Poor planning…. So I have dropped almost everything except my daughter. I am studying 8+ hours a day. So hopefully I will be ready enough by 4/30. So after all results come out in May…I may have all 4 sections or worst case scenario fail FAR and REG and lose AUD and only have one section. I have been studying non-stop so hopefully it's enough. Some of the SIMS in FAR have me worried. I was prepared for the MCQ's.

A - 79 expires 4/30/16 need a pass on REG
B - 78
F - 80
R - 83!!! Can live again!

[Spartans92]

Yikes, hopefully the worst case WON'T happen! Best of luck! I know this journey must have been tough.

BEC- PASS

[Credit Revenue]

Thanks!! I mean I am over it, but at the end of the day I backed myself in a corner by taking 6 month breaks from exams and so forth. I would do it different if I had to do it all over again. Hopefully, I pass both of these and I can just move on with life. Anyways… Good luck to you as well!!

A - 79 expires 4/30/16 need a pass on REG
B - 78
F - 80
R - 83!!! Can live again!

[mckan514w]

On December 1, 20X1, Money Co. gave Home Co. a $200,000, 11% loan. Money paid proceeds of $194,000 after the deduction of a $6,000 nonrefundable loan origination fee. Principal and interest are due in 60 monthly installments of $4,310, beginning January 1, 20X2. The repayments yield an effective interest rate of 11% at a present value of $200,000 and 12.4% at a present value of $194,000. What amount of income from this loan should Money report in its 20X1 income statement? answer is $2005– what am I missing here Why would they recognize income from the loan origination fee???

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, the call of the question is asking how much INCOME is reported. If they have proceeds of 194000 and that is the present value. Using the effective interest the rate is 12.4% so you take 194k * 12.4% = 24056 this amount is your annual income and that is only from dec1-dec31 so take 1/12. Therefore, 2005. Notice you would not use 200k because that is the receivable. So only if they had ask about expenses that would be the monthly amount paid. I am not positive but I always think origination fee is deducted from the original amount.

BEC- PASS

[Author]

Replies