[jeff]

Welcome to the FAR CPA Exam study group for July & August 2018 exams. 🙂

Please introduce yourself & when you’re taking your exam (approximate timeframe).

FAR Study Group Links and Resources:

1. NINJA Monthly – Full FAR Course for $67/mo
2. How to Study for FAR with NINJA Only
3. How to Pass FAR in 20 Days
4. How to Retake FAR After Failing
5. Video: Study Advice for FAR
6. CPA Reviewed Podcast
7. CPA Exam Score Release Dates
8. NINJA MCQ Trending vs Actual FAR Scores
9. I Passed the CPA Exam!
10. I Passed FAR!
11. NINJA FAR SIMS List by Topic
12. Free Downloads: NINJA FAR

[hopefulcpa2016]

Starting to study FAR tomorrow. Just took BEC today. I passed FAR a few years ago, but then life happened and I am starting over. What product is everyone using to prepare? WILEY or NINJA? Good luck to all!

[Anonymous]

Does anyone have any suggestions on the best way to study all these journal entries?

[Julia]

@hopefulCPA: good to c u here! I use Becker books to read. I incorporate Becker info into my NINJA notes in diff colored pens. I then re-write my NINJA notes bi-weekly. I kill MCQs.
I heard good things bout Wiley. Everyone's study style is diff. So ur materials depend on u. But, I will say NINJA MCQ resemble the test the most.
PS: I also loved ROGER.

[Julia]

@Divs: I write out A=L+SE I then use arrows to show what I'm doing w the JE. Buy car w cash: Dec A & Inc A. It sounds dumb & Accounting 101, but it works. If u think bout what ur trying to do instead of memorizing JE, it sticks better.

[Apii]

I am starting my study today ..too much of resistance to start,errrrr.. I had scheduled my test on Aug 3. Have to give my last try for far …God help me ..hehe

[Anonymous]

Erika's Surf Shop had taxable income in Year 2 of $500,000 and pretax financial income of $600,000. The
company had a cumulative $200,000 difference between its taxable income and pretax financial
statement income at December 31, Year 1. These differences were solely related to accelerated
depreciation methods used for income tax purposes. The enacted tax rate increased to 30 percent in
Year 2 compared to an enacted rate of 20 percent in the prior year. At December 31, Year 2, the company
would record a deferred tax expense of:
A. $40,000
B. $50,000
C. $90,000
D. $150,000
Choice “B” is correct. I can not figure it out how to calculate 50,000. And my answer is (600-500)*30%=30
Could someone help? Thanks in advance!!

[Globetrotter]

Anna,
In 2xx1, you would have $40,000 deferred tax expense and liability = $200,000 x 20% (Year 1 enacted tax rate).
In 2xx2, your def tax liability would have to be $200,000 x 30% plus (600,000-500,000)x30% = $90,000.
You already have $40,000 liability accrued from 2xx1. You just need $50,000 extra.

[Apii]

Hi friends

I am clueless when I look at my score …I felt after giving aud & reg that I had given my best. However I had just broadline passed, which is good undoubtedly. I just want to understand from high scored(above 90) friends. How you guys reach there and I missed it ..

[cpaswag]

I get explanation all the way to $14,922 how is that calculated? also, what would be journal entries?

On June 30, 20X14, Ariadne, Inc. issued 2,500 of its 6%, ten-year, $1,000 face value bonds with detachable stock warrants at par. Each bond carried a detachable warrant for one share of Ariadne’s common stock at a specified option price of $24 per share. Immediately after issuance, the market value of the bonds without the warrants was $2,250,000 and the market value of the warrants was $305,000. In its December 31, 20X14 balance sheet, what amount should Ariadne report as bonds payable, net of discount or premium? Assume straight-line amortization.

Explanation :

The proceeds of bonds issued with detachable warrants are allocated between the bonds and the warrants based upon their relative FMV at the time of issuance. Since the bonds had a fair value of $2,250,000 and the warrants a fair value of $305,000, the total of the fair values is $2,555,000. The bonds account for 2,250,000 / 2,555,000 or 88.0626% of the proceeds of $2,500,000 or $2,201,565 and will be recorded, at issuance, at face of $2,500,000 minus a discount of $298,435 for a net amount of $2,201,565. The warrants account for 305,000 / 2,555,000 or 11.9374% of the proceeds of $2,500,000 or $298,435. On the balance sheet date straight-line bond discount amortization of $14,922 would be recorded, for a resulting bond payable, net of unamortized discount, of $2,216,487.

[Ghenah]

Anna_shi

You could treat the problem as following :
First, you have already calculated the deferred expense of year_2. (30%*[600,000-500,000]=30,000)

But, keep on your mind that , there is an incremental enacted tax rate which is(20%-30%=10%).

So, the above mentioned incremental tax must be applied to the former cumulative difference of (200,000).
10%*200,000=20,000.

Lastly, add 20,000 To 30,000
The total will be (50,000)

This make it more sense , according to the law the incremental tax rate to be imposed to the former year.

Good Luck

[young scholar]

When are you taking your exam? august 13 just rescheduled
What exam topic keeps you awake at night? any journal entry that requires memorizing special arithmetic and stuff for, capital leases, repurchase agreements… goddamn everything
One study or career tip others might find helpful – u know more than you think

[young scholar]

hi my name is michael
When are you taking your exam? august 13 just rescheduled
What exam topic keeps you awake at night? any journal entry that requires memorizing special arithmetic and stuff for, capital leases, repurchase agreements… goddamn everything
One study or career tip others might find helpful – u know more than you think

[Anonymous]

Hi. Can someone explains this one to me? Thanks!
The following trial balance of Mint Corp. on December 31, 20X1, has been adjusted, except for income tax expense.

TRIAL BALANCE

December 31, 20X1

Debit Credit

Cash $ 600,000

Accounts receivable (net) 3,500,000

Cost in excess of billings

on long-term contracts 1,600,000

Billings in excess of costs

on long-term contracts $ 700,000

Prepaid taxes 450,000

Property, plant, and equipment (net) 1,480,000

Note payable (noncurrent) 1,620,000

Common stock 750,000

Additional paid-in capital 2,000,000

Retained earnings (unappropriated) 900,000

Retained earnings (restricted for

note payable) 160,000

Earnings from long-term contracts 6,680,000

Costs and expenses 5,180,000

$12,810,000 $12,810,000

=========== ===========

Other financial data for the year ending December 31, 20X1:

•Mint uses the percentage-of-completion method to account for long-term construction contracts for financial statement and income purposes. All receivables on these contracts are considered to be collectible within 12 months.

•During 20X1, estimated tax payments of $450,000 were charged to prepaid taxes. Mint has not recorded income tax expense. There were no temporary or permanent differences. Mint's tax rate is 30%.

In Mint's December 31, 20X1, balance sheet, what amount should be reported as total current assets?
A 5000000
B 5450000
C 5700000
D 6150000

[Ghenah]

Hi, DREMXU

Regading your question,
The correct choice is (a) 500,000.
Here is the explanation:
Cash:600,000
AR: 1500000
NEet

[Globetrotter]

Dreamxu and Mom_2938,
Billings in Excess of cost and Prepaid Tax Expense are also current.
Correct answer is D.

[Author]

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