[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]

I was reading material for Business Combinations. If I am not wrong there is no difference in Acquisition method and Purchase method? (in terms of allocation and accounting) Or am I missing something?

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]

Kanwal,

I think they are the same thing.

You are using the CAR IN BIG mnemonic right?

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

[KJ]

I don't know if you guys read my previous post…I did over 30 sims in 3-4 hours other day and I found those little easier than MCQ.

Just3letters you are right they are very helpful and imo your MCQ average will go up after doing some of the SIMS.

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]

I am not using becker/roger so I did not know about that mnemonic.

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]

Kanwal,

That's a huge amount of SIMS lol

Must have been those fill in the blank ones. The bond/lease sims take me 10-13 minutes

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

[KJ]

There were only 7-8 long ones(cash flow, LIFO, Bond, A/R/Bad debt, etc.)…rest were small ones with AL, J/E, Accounting changes, GASB etc.

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]

what is CAR IN BIG?

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]

Kanwal,

Common stock- Eliminate equity of acquired company
Apic- Eliminate equity of acquired company
Retained earnings- Eliminate equity of acquired company

Investment in Subsidiary-Eliminate investment at FV
Nnon-controlling interest-Eliminate NCI at FV

Balance sheet revaluations adjust to fair value
Identifiable intangible assets adjust to fair value
Goodwill or gain (this is a plug)

CAR IN BIG: If you use this mnumonic for all acquisition method questions you can easily find the resulting goodwill/gain which would be the plug to the acquisition J/E

If you don't understand just ignore this. I loved this method to do acquisition j/e's

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

[KJ]

Just3, this is good. I will definitely add in my notes. Thanks!!

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]

Yep! anytime 🙂

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

[Claudia408]

I know we have beaten this cash flow thing to death right?

anyways, i was on board for reconciling cash flows for non cash items with the add in the negative, subtract the positive but doesn't work for this question?

Green Co.'s 20X4 statement of cash flows reported cash provided from operating activities of $375,000. For 20X4, depreciation of equipment was $130,000, amortization of goodwill was $15,000, cash inflows from the issuance of common stock was $75,000, and dividends paid on common stock was $25,000. In Greens’ 20X4 statement of cash flows, what amount was reported as net income?

Amswer: ($375,000 – $130,000 – $15,000) $230,000.

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

[marqzho]

I don't like to remember what to subtract or what to add in dealing with cash flow.

Think about it like your own business, it's all about logic.

Let say you start your business on 1/1, you have zero in cash. At 12/31,

you have $375,000 in your bank account for day to day operation.

And I tell you, you have a depreciation expense for $130,000,
you amortize goodwill for $15,000

What is your net income ? 375-130-15 = 230

cash inflows from the issuance of common stock? Does it affect your net income or bank account for day to day operation ? No
dividends paid on common stock?Does it affect your net income or bank account for day to day operation ? No

REG 90
FAR 95
AUD 98
BEC 84

[marqzho]

—

REG 90
FAR 95
AUD 98
BEC 84

[marqzho]

—

REG 90
FAR 95
AUD 98
BEC 84

[mckan514w]

Here you are working backwards Claudia… instead of being given Net Income and being asked to find operating cash flow you are given Cash Flow and asked to find Net Income…

So Operating Cash flow = Net Income + Depreciation and amortization +/- changes in your operating accounts here your only items operating are the Dep and Amort so if you were given NI of 230 you would add Dep of 130 and Amort of 15 to get Cash flow operations 375…

Instead you are given Cash Flow of 375 and asked to come up with NI so you subtract out the Dep. and Amort. so 375-130-15=230

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

[Author]

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