[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

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[Globetrotter]

Hi Kmgentil,
I do not have access to Becker but here is what I recall.
You would debit Investment account if you account for your investment under the Equity Method. Significant Influence, over 20% of Common Stock and such. You would debit your investment if the company (whose stock you are holding) posts income. Correspondingly, you would credit investment for your % of losses and dividends. In fact, if memory serves, you will not use Fair Value to account for this kind of investment.
You would adjust Trading and Available for Sales values through valuation accounts for the changes in Fair Value.

[kmgentil]

Globetrotter, thank you so much for the response! Any adjustments to mark to market go to valuation account and anything equity method touches investment account. Much appreciated!

[iduhkobe]

AICPA.930525FAR-P1-FA

On November 30, 2004, Parlor, Inc. purchased for cash at $15 per share all 250,000 shares of the outstanding common stock of Shaw Co.

On November 30, 2004, Shaw's balance sheet showed a carrying amount of net assets of $3,000,000. On that date, the fair value of Shaw's property, plant, and equipment exceeded its carrying amount by $400,000.

In its November 30, 2004, consolidated balance sheet, what amount should Parlor report as goodwill?

$750,000
$400,000
$350,000
$0

The answer is C, why is the answer not D? I thought because of the consolidation process that a goodwill was disallowed and would just raise the value of the asset (not goodwill) and be depreciated overtime ?

[Globetrotter]

Iduhkobe,
Goodwill is the difference between the fair value of the assets and what you paid for them.
You will report it on your consolidated statements. You will depreciate the difference between the book value of the assets and fair value of the assets on Consolidated statements over time.
However, on the parent company statement, Goodwill is not shown.

[krstnam]

Please help.
Sales was $300,000. Gross Profit on sales is 25%. What is Cost of Goods Sold?
I did 300000/1.25 = $240,000 (which was not an available answer)
The correct answer is 300000*.75 = $225,000

Maybe I've got a case of brain drain. If there is a 25% markup on COGS. wouldn't revenue be $225K*1.25=281,250?
The answer explanation says that the given gross margin is 25%, but the question doesn't say gross margin, it says gross profit. Should I have just assumed they meant to say gross margin, or should i expect gross profit and gross margin to be used interchangeably.

[Anonymous]

@Krstnam
Gross margin is a percentage which can also stated as Gross Profit Margin. Gross profit is a dollar amount. As in the example above the Gross Profit Margin is 25% while the Gross profit would be $75,000 ($300,000-225,000). It can be confusing.

Looking at the question, they easiest way for me to understand is that gross profit margin is 25% of $300,000 which means that 75% of $300,000 is COGS which is $225,000.

[krstnam]

I guess I'll have to pay attention to what comes after gross profit. If it's expressed as a %, i'll assume they mean gross profit margin. Or the other way is I can calc the problem both ways and see if one of them is the answer. In my question above, the answer I thought it would be was not an available option so I picked the other calculation that I thought was incorrect.

[curlyhare]

I see the feed has quieted down, I assume everyone left taking FAR in Q3 is cramming it in during these final days. I took the test today. It is my final one to pass and I lose AUD 8/31 if I don't 🙁 so I really hope I passed today. I felt great and zoomed through the MCQs and the 1st DRS testlet then went on a break at the 2 hour mark (not fast but not unforgivably slow). After the break, it happened, I got 5 out of 6 time consuming DRS and wanted to scream. Long story short I did not finish 1.5 sims (hangs head and weeps). Sage advice: know NFP, GOVT, Leases, and Cashflow Statements cold. Love them, have relationships with them, introduce them to your parents. NFP/GOVT was 40% of my exam (between MCQs and Sims) which I was super happy about because I did indeed marry and procreate with them. Leases and Cashflow statement prep, meh…not so much, we might have grabbed drinks a few times. Overall, exam has easier than I anticipated, I used roger, totally prepares you for the exam, but my weak areas came back to haunt me in Sims. Best of luck to everyone. (crosses fingers, please let me be done).

Oh and one more thing…Remember for govt/IFRS sims, there is my authoritative literature to save you 🙁

[kmgentil]

@Curlyhare, I just took the test today and I didn't get to two sims. I too felt decent about the rest of the test, but it was just information overload for many of the sims, and many of the MCQs had a lot of information to read as well. It's strange, for both AUD and REG I was kicking myself on my way home because I realized I got a few questions wrong. The only regret I have with FAR is that I should have filled in 0s into the sims I didn't touch (hail mary). If I had to do it all over again I don't think I would do it differently because I know I would just botch one of the other questions. The amount of reading I did on that test would equate to 3 chapters of Harry Potter.

[Anonymous]

Good day everyone,

Going for the free 30 day access:
When are you taking your exam?
End of October 2018

What exam topic keeps you awake at night?
Plan to begin the journey with FAR & have been out of the accounting loop for many years. Time to jump back into the pool! But to answer the question, most of FAR since I'm starting again from scratch.

One study or career tip others might find helpful.
I wake up early to study and then my study choice is primarily audio on the way to/ home from work and MCQs. I'm considering this course as my full-time method of study. Any and all advice is welcomed!

[bobajo992]

@curlyhare Thanks for the info. Quick question for cashflow statement it was for Govt or not? I am taking FAR next week. 🙁

[krstnam]

I like quizzes:
When are you taking the exam: 9/4
What keeps you awake at night: 5th try at FAR – every time something went down. One time the testing center moved and since I had been going to the same place 6 other times I didn't pay attention, I was able to test because I barely made a 30 minute grace period window but was panicked and couldn't calm down until the test was half way through. Another attempt the software kept glitching and selecting different answers than the one I clicked, it was really messing with my head to the point I was thinking maybe God is directing me to the correct answer LMAO!!! It also crashed 3x and I ended up having to change seats.
Other than general anxiety, the statement of CF is my nemesis. I am going to hit that forward and backwards, converting from direct/indriect, accruals, etc. We can't disclose what we've seen on exams but I feel I will be best prepared if I know that area really well. I would be really upset if I got a comprehensive bank reconciliation DRS that even if planned out very well takes 30 minutes to finish.

Advice – what always seems to get me on the MCQs was little nuances in the questions. Like do I use undiscounted future cash flows or discounted. That little “un” makes a huge difference.

[TalkNerdyToMe]

@Curlyhare, thanks for the heads up and also for the humor! I don't sit for the exam until December 10th, but I'll make sure to review those topics very carefully. Good luck! I'm sure you did great!

[siddkid]

@curlyhare Since u had Roger, how did u think it helped and if anything, that u feel roger didn't prepare you for? I was thinking of getting extra MCQ's cz i felt Roger didn't have enough of them. Do you think that would be needed ?

[TalkNerdyToMe]

I'm sure I'll get to worse topics, but the inventory sections are not fun! These retails methods are killing me for some reason! Must keep moving!!

[Author]

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