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March 18, 2016 at 4:43 am #200895
jeff
KeymasterWelcome to the Q2 2016 CPA Exam Study Group for FAR.
Some BLITZ videos to help your exams: https://www.another71.com/ninja-blitz
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March 26, 2016 at 5:32 pm #763776
Claudia408
ParticipantHi again… for capitalization of interest on construction… For this question, the answer indicates that the $15k in unrelated interest expense is included in the answer for capitalization of interest.
1. I thought you can only capitalize interest related to the construction itself?
2. It also indicates that all of the $600k loan is capitalized for 2015, but didn't I already include that loan for 2014? Am I suppose to include that in 2015 again because what I actually spent in 2014 was less than the loan amount?Sylvester Co. takes out a 12% loan of $500,000 on 1/1/2014 to finance construction of a building for the company’s own use. Construction begins immediately, and $600,000 is spent on the construction at an even pace during 2014. Another $400,000 is spent at an even pace during 2015, with construction completed on 12/31/2015. No other construction loans are taken out. Sylvester incurred unrelated interest expenses of $10,000 and $15,000 in 2014 and 2015, respectively, on loans that bear interest at 10%. How much interest can Sylvester capitalize in 2014 and 2015?
Answer: 2014: 36,000, 2015: 75,000
BEC - 75 (3x)
AUD - 78 (3x)
REG - 67, 66, Aug 1
FAR - 54, Sept 8March 26, 2016 at 11:17 pm #763777Spartans92
ParticipantThe following information pertains to Ceil Co., a company whose common stock trades in a public market:
Shares outstanding at 1/1
100,000
Stock dividend at 3/31
24,000
Stock issuance at 6/30
5,000What is the weighted-average number of shares Ceil should use to calculate its basic earnings per share for the year ended December 31?
a.
129,000
b.
123,000
c.
120,500
d.
126,500Answer: 124,000 shares x 6/12 = $ 62,000
129,000 shares x 6/12 = 64,500
Weighted average $ 126,500Please Disregard this Question. I figured out what I messed up! But I do have a Question.. What if the stock issuance happened before the Dividend? That is, the issuance occurred 3/31 and dividend occurred 6/30. I would have to apply the 24,000 to the beg (retroactively) 124000 + 3750 (5000 *9/12)??
BEC- PASS
March 27, 2016 at 11:33 am #763778Anonymous
InactiveJust when I think I understand the Cash Flow categories, I get something like this:
A not-for-profit voluntary health and welfare entity should report a contribution for the construction of a new building as cash flows from which of the following in the statement of cash flows?
A. Operating activities
B. Financing activities
C. Capital financing activities
D. Investing activitiesAccording to FASB ASC 958-230-55-3, a contribution to a not-for-profit restricted to long-term purposes like construction shall be reported as a cash flow from financing activities. Cash flows received from investment income restricted by donor stipulation to the same purposes also are reported as financing activities, not as operating activities.
I thought Financing Activities were Liabilities/Equity stuff and Investing Activities were Asset stuff.
Anybody have a clear way to understand this – I'm stuck with trying to memorize rules at the moment, and that's not working.
March 27, 2016 at 6:42 pm #763779Operation_CPA
Participant@DMOORE33
NFP Statement of Cash Flows:
1). Operating Activities – contributions, interest income, dividend income
2). Financing Activities – cash transactions related to borrowing / certain **restricted** contributions
3). Investing Activities – Proceeds from sale (art), investment in equipment, proceeds from sale of assets received in prior periods
Now, to answer your question, the answer is a financing activity because the contribution is **restricted** for a specific purpose, in this case the construction of a new building. If the contribution was simply a general cash contribution (to be used for anything), I would have classified it as operating. The key here is the restriction.
March 27, 2016 at 7:31 pm #763780Spartans92
ParticipantWanting to take the day off… especially it is beautiful outside! Should I or no?
Happy Easter btw!BEC- PASS
March 27, 2016 at 8:32 pm #763781Claudia408
ParticipantYou could take the day off… or maybe just squeeze in some MCQs then head off to a nice Easter dinner. That's my plan…
Studying for FAR is sooooooooooooooo slow for me. So many calculations I can't focus and I certainly can't remember everything. I know I have another month to hammer MCQs but this is terrible. It takes me 2+ hours to get through 40- 60 questions. Who else is with me!??!
BEC - 75 (3x)
AUD - 78 (3x)
REG - 67, 66, Aug 1
FAR - 54, Sept 8March 27, 2016 at 9:01 pm #763782Spartans92
ParticipantI totally understand Claudia! I am listening to the lectures and reading/notes taking. I may just do that and have the info process and head out to dinner. Then hammer the MCQ tomorrow. FAR is definitely overwhelming I took 2 hours to do 36 problems yesterday but I guess it is all about understanding. I am finally seeing my mcq average going up for every section I do. Good Luck!
BEC- PASS
March 28, 2016 at 2:47 am #763783patelhj1
Participant@ Claudia408
I'm using Becker and Im on F7 topic. It takes me 3 hours to get through 40-50 questions. Each topic is harder than the last and I already seem to forgot most of what I learned in F1-F6…. Its going to be a long ride…. and i'm currently scheduled for the test on April 19.
I didn't study today. It was Easter and took break off to spend some relaxing time. I will resume to insanity studying after today and continue till my test date April 19.
Best of Luck, and remember we are all on the same rocking boat!
BEC 78 08/2015
REG 71 11/2015, RETAKE 83 01/2016
FAR 75! 5/2016
AUD ? 8/2016Becker with Nonstop NINJA MCQ
Google most difficult professional examMarch 28, 2016 at 3:12 am #763784Spartans92
Participant@patel, thanks and same to you. I'm also on F7 and I find becker much more confusing than how my professor taught in intermediate. Kinda regret for not paying more attention. I'm om cash flow 🙁 totally on same page, I too forgot a lot of earlier material but hopefully review will be easy to recall. I plan to finish the remaining later this week and plug ninja mcq until test date. You are so close to the end of the tunnel! Keep it up.
BEC- PASS
March 28, 2016 at 5:05 am #763785Claudia408
Participanti am using Roger and about a week ago, i finally finished all the lectures, taking notes and took about 800 of the MCQs. now i'm going back to the beginning only doing MCQs and SIMs for the next month and i'm scoring 50% on most topics. i went so slow trying to get through the lectures i've forgotten most of it…UGH.
we will get through this, there is still time! gotta hit MCQs hard everyday!
BEC - 75 (3x)
AUD - 78 (3x)
REG - 67, 66, Aug 1
FAR - 54, Sept 8March 29, 2016 at 2:05 am #763786Spartans92
ParticipantOn July 1 of the current year, Dewey Co. signed a 20-year building lease that it reported as a capital lease. Dewey paid the monthly lease payments when due. How should Dewey report the effect of the lease payments in the financing activities section of its statement of cash flows?
a.
An inflow equal to the present value of future lease payments at July 1, less current year principal and interest payments.
b.
An outflow equal to the current year principal payments only.
c.
An outflow equal to the current year principal and interest payments on the lease.
d.
The lease payments should not be reported in the financing activities section.Answer is B. Got it right because of book but it said the interest payment is reported as operating. But then Olinto says operating activities includes non interest bearing liabilities. I am confused why is the interest payment part of operating?
BEC- PASS
March 29, 2016 at 4:43 pm #763787SONA
ParticipantLambert, Inc. is a manufacturer of men's casual clothing. The founder and CEO of the company retired on June 30, Year 1, after 10 years of management. During this time, sales and net profits increased modestly, but the CEO was very conservative about taking credit risk.
On July 1, Year 1, Lambert hired a new CEO with a strong marketing background. The company adopted a new business plan, which includes aggressive expansion into new markets and liberalization of the company’s credit policy. This new business plan was implemented in the fourth quarter of Year 1, and resulted in a significant increase in sales for the month of December.
Lambert uses the allowance method to record doubtful accounts for financial statement reporting. In prior years, Lambert estimated its uncollectible accounts receivable by applying an estimated percentage to each category reported on the accounts receivable aging analysis. This percentage is based on historical data. The following table summarizes the accounts receivable aging analysis at December 31, Year 1, and the related estimated percentage uncollectible for each category.
Accounts Receivable Aging Analysis
at December 31, Year 1
Aging Category Balance
Estimated
Percentage
Uncollectible
0 – 30 days $225,000 1%
31 – 60 days $240,000 9%
61 – 90 days $127,000 23%
over 90 days $85,000 60%
The balance in the allowance for doubtful accounts at January 1, Year 1, was $62,000. The activity in this account during Year 1 consisted of the write-off of accounts valued at $19,000 and a recovery of $4,000 in accounts that were written off in previous years.The Lambert accounting staff identified the following unrecorded adjustments while performing the year-end review of accounts receivable balances:
• An account receivable for $12,000 that was invoiced in February, Year 1 was deemed uncollectible because the customer was declared bankrupt on November 30, Year 1. The balance has not yet been written off.
• An account receivable for $5,000 that was invoiced in August, Year 1 was collected. However, it was not properly removed from the accounts receivable subsidiary ledger and the aging analysis.
As a result of the change in the Lambert credit policy during Year 1, the CFO believes that the estimated percentage uncollectible for each aging category should be increased by two percentage points.I cannot figure out why there is 2% increase in the estimated percentage uncollectible?
March 29, 2016 at 7:18 pm #763788Excel14
ParticipantQuestion for all of you, related to exchanges of nonmonetary assets. Normally we value the exchange at the fair value of assets given up, unless the fair value of the assets received is more clearly evident. No particular problem do I have to share, but in an example in Gleim, only the “estimated values” of two parties' assets were known. The journal entry involved the fair value of assets received as the solution. Now my question is this….if the fair values couldn't be readily estimable for either party, why then did the professor go with the value received? If it is an estimate for both parties, you are guessing with the amount given up or received. Hope this makes sense.
BEC (2/28/16) ----- 78
FAR (09/10/16)-----
AUD
REGCIA, CGAP, CFE
March 29, 2016 at 8:03 pm #763789EuroAddict
Participant@SONA – look at that very last sentence in your Q
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BEC - 77, 03/2015 (first try)
FAR - 79, 05/2015 (second try)
REG - 83, 12/2015 (first try)
AUD - 84, 03/2015 (first try)I got 99 problems but the CPA ain't one.
March 29, 2016 at 8:26 pm #763790mchels85
MemberTaking FAR late May and using Wiley and Ninja Audio.. Any studying tips while working full-time would be helpful!
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