[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

[Zyx]

Just3Letters, thanks for explaining that.

Can anyone walk me through allowance collectible? I have studied on this topic intensively but I get more confused.
So after you book an estimated allowance uncollectible by debiting bad debt exp and crediting uncollectible. If some customers default on payments, we debit AR and credit uncollectible which reducing uncollectible. To me I feel like if we have more defaulted payments, uncollectible should increase (because we have more payments that are uncollectible). The more I study the more I'm confused!

REG: 77 x2
BEC: 81 x3
FAR: 68 retake 10/1
AUD: 8/27

[Spartans92]

zyx, there are two methods you use depending on the Question. There is the direct write off which is DR: Bad debt expense CR: uncollectible this method is used if we know for certain we won't be able to collect. The allowance method is we estimate based on trends or other means. For instance, a company knows x% will become uncollectible you would then take that percentage and DR: Uncollectible and CR: AR. If subsequently we receive the payment then you will have to reverse that entry and then DR: Cash and CR: AR. I dont know if that is helpful. Usually the question will tell you which method to use.

BEC- PASS

[Just3Letters]

What is even happening here?

Ott Company acquired rights to a patent from Grey under a licensing agreement that required an advance royalty payment when the agreement was signed. Ott remits royalties earned and due, under the agree­ment, on October 31 each year. Additionally, on the same date, Ott pays, in advance, estimated royalties for the next year. Ott adjusts prepaid royalties at year-end. Information for the current year ended December 31 is as follows:

Date Amount
—– ——–
01/01 Prepaid royalties $ 65,000
10/31 Royalty payment (charged to royalty expense) 110,000
12/31 Year-end credit adjustment to royalty expense 25,000

In its December 31 balance sheet, Ott should report prepaid royalties of:

A.
$25,000.

B.
$40,000.

C.
$85,000.

D.
$90,000.

D is correct.

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

[Spartans92]

Just3, Think u are over analyzing the question. Beg period u have 65k and year end adjustment is 25k.. 65+25=90. The 110k is charged to expense so the whole amount was paid which is irrelevant in this case. It clearly states in the question Ott adjusts prepaid at year end so we know the year end amount is prepaid. Hope that helps.

Sometimes we become anxious and our minds aren't functioning the way it should. Take your time and think through the problem and dont get too nervous. Good Luck!

BEC- PASS

[Just3Letters]

I wish Ott had just debited prepaid rather than credited an expense account

Thanks! and yes, just over-analyzing everything this week apparently 🙁

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

[Spartans92]

So the scores comes out on the 24 and I have BEC on the 10th. I am planning to not look at it since it doesn't really help. Pretty sure I failed so knowing that I actually did will add more stress. Would y'all say focus on BEC then check the score after the exam is over?

BEC- PASS

[Just3Letters]

I would definitely look at it. No matter what you think you know, you never really know until you look.

Plus, the report gives you areas that you need to work on relative to other candidates who passed with a 75-80 so that can be super helpful while you still have some of this nonsense in your brain

Also, I've never been able to put off looking at exam scores haha

We will find out our scores on the same day!

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

[Spartans92]

LOL thanks for the reply just3.. Seriously, this one question I recall on the exam is stuck in my head I wish I could ask y'all on here but per the disclosure rule I can't.. ugh! I just dont get how to do it..never had something like that in becker before.

BEC- PASS

[Just3Letters]

lol can't change the past I guess is what they say

But you can have a beer or three tonight if that makes you forget the question in the first place 🙂

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

[Just3Letters]

lol can't change the past I guess is what they say

But you can have a beer or three tonight if that makes you forget the question in the first place 🙂

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

[Spartans92]

right, cant change whatever is done but I just wanna learn how to do it in case a similar one comes up next time but the chances of that may be slim.

BEC- PASS

[Just3Letters]

Yeah I totally understand that…

if you find a similar problem somewhere on the interwebs post it here but just don't say it's a question from your exam

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

[MaLoTu]

@Spartans – on BEC have you gotten to B2 and B3 yet? I read you were saying how B1 wasn't too bad, so I am just curious …

[Spartans92]

Malo Tu, just finished B1. Starting B2 tomorrow.

BEC- PASS

[patelhj1]

Can someone refer me to where I can practice the DRS (any website)? I'm using Becker and have it up to date so if one of the chapter has the DRS can someone refer me to it?

Also seems from people that took the FAR exam the SIM heavily tested on JE?

Was the NFP / Gov't a big part 20% as the claim?

Thanks for the feedback! Keeping everyone in my prayers!

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

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[Author]

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