[jeff]

SO I know every test is different but does anyone have any insight on what has been heavily tested recently? I take the exam Monday and I need to narrow my focus….Thanks!

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

[Anonymous]

Can someone run through the steps on how to solve. The answer is $120,000

During year 1, Mitchell Corp. started a construction job with a total contract price of $600,000. The job was completed on December 15, year 2. Additional data are as follows:

Year 1 Year 2

Actual costs incurred Y1 $225,000 Y2 $255,000

Estimated remaining costs Y1 225,000 Y2 $0

Billed to customer Y1 240,000 Y2 360,000

Received from customer Y1 200,000 Y2 400,000

Under the completed-contract method, what amount should Mitchell recognize as gross profit for year 2?

$ 45,000

$ 72,000

$ 80,000

$120,000

[rbozung]

CPA dream,

I find the easiest way to look at completed contract is to logically think about it (rather than memorize anything).

For calculating Gross Profit: Step 1: always look at the estimated remaining costs to determine first if any profit is recognized. If this amount is NOT zero, do not recognize anything. No profit is recognized until all costs are recovered. Step 2: Total billings = Total contract price. ($240k + $360k) or $600k. Step 3. Total expenses are actual expenses incurred ($225k + $255k) or $480. Step 4: “Rev – exp” (now that all of your costs are covered: step 1) = $600k – $480k or $120k GP.

It is just like calculating any other gross profit and just waiting until there are no more estimated costs to complete.

BEC - Passed
AUD - Passed
FAR - 10/28/14 (waiting results)
REG - Passed

[CPAfit]

@rbozung hey how are you? how's the prep coming along. I just gotta ask you if you got any tips on how to study for Bonds. I went through some of the MCQs in F5 and I didn't do well. I mean if anybody got any tips for Bonds, I'd realy appreciate it. Thanks

[rbozung]

Zubairs, I have a great schedule that I put together on a note card for premium and discount effective method. It lays out what is actually paid, what is the interest expense, what is the prem/dis, what is the amortization and the carrying value. I will send that along.

BEC - Passed
AUD - Passed
FAR - 10/28/14 (waiting results)
REG - Passed

[rbozung]

Zubairs, I have a great schedule that I put together on a note card for premium and discount effective method. It lays out what is actually paid, what is the interest expense, what is the prem/dis, what is the amortization and the carrying value. I will send that along.

BEC - Passed
AUD - Passed
FAR - 10/28/14 (waiting results)
REG - Passed

[Anonymous]

thanks @rboz!! that helps a lot 🙂

[Anonymous]

Does anyone have a good way of remembering how to calculate dollar value lifo. I'm having such trouble with that.

[Juliemiddle]

Hey, future FAR takers. I just got back from my exam. Suggestion – be sure to practice SIMs. You need to be familiar with seeing lots of information presented and be able to break it down for whatever the SIM is asking for. My one bit of advice w/o giving anything away 🙂

AUD: 84 - Oct. 2013
BEC: 83 - Feb. 2014
REG: 91 - May, 2014
FAR: 68, 96 - Oct. 2014...DONE

CPAExcel, Ninja Audio (all sections)

[rbozung]

Julie, thanks for the tip! I hope that you feel good about how you did. What did you do for your final review (say your last 203 days)?

BEC - Passed
AUD - Passed
FAR - 10/28/14 (waiting results)
REG - Passed

[moreinfo2013]

What is the journal entry for the following question?

Universe Co. issued 500,000 shares of common stock in the current year. Universe declared a 30% stock dividend. The market value was $50 per share, the par value was $10, and the average issue price was $30 per share. By what amount will Universe decrease stockholders' equity for the dividend?

[juuustin]

Does anyone have a good method to handle the interco eliminating entries? I have CARINBIG down for the acquisition of the sub, but I am getting destroyed by the multi part sims that require elimination of intercompany transactions. I understand the premise, but I am having a tough time with the specific J/E's. I am wondering if there is a step-by-step system that can be applied to pretty much any fact pattern.

I am attempting to write out the original J/E's for both parent and sub that would occur in the initial transaction and then determine what the proper ending numbers should be, but I am not having much success!

MD Candidate: 10/1/14

FAR - 87 (11/23/14)
REG - 87 (1/30/15)
BEC - 89 (4/19/15)
AUD - 98 (5/30/15)

Ethics - 100

Experience - In Progress!

[rbozung]

Moreinfo:

This is a large stock dividend (greater than 25%) and this means that the entry involves par value (the $10) (vs. FV when it is a small stock dividend).

JE to company:

DR Retained earnings (500k x .30 x $10) $1,500,000

CR Common Stock (500k x .30 x $10) $1,500,000

BEC - Passed
AUD - Passed
FAR - 10/28/14 (waiting results)
REG - Passed

[Pandarama]

“Carlson City's fiscal year ends December 31. On August 1, the city issued a purchase order for new vehicles to be delivered at the rate of two per month beginning October 15. Twelve vehicles were delivered as scheduled and payments of $264,000 were made from the general fund upon delivery. If these were the only transactions made by the city, and the city started the year with just enough cash to complete these transactions, which of the following balances would appear on the balance sheet as of December 31?”

It says, “he city started the year with just enough cash to complete these transactions”. If the transactions total $264,000…. wouldn't you think that the starting amount for the year for the purchase order was $264,000 considering there was “just enough cash to complete these transactions”??

So confused right now…. some how the answer relates to $132,000?

Maybe I'm reading something wrong, Idk.

BEC - 80
AUD - 64, 75 - credit lost, 90!!
REG - 73, 74, 83
FAR - 61, 72, 85

Feels good finishing on my best note. Time to watch the mailbox.

[rbozung]

Latwell, the answer falls in the time frame. They ask for the amount that should appear on the Dec 31 balance sheet. 2 trucks per month starting on October 15 so you get 3 months of two trucks being delivered (Oct 15, Nov 15, Dec 15). $264,000/6 months (this is the 12 trucks at 2/month) = $44,000 per two truck delivery x 3 months = $132k. The city started the year with $264k and paid $132k for the 3 months. $132 is the difference and balance at the BS date.

BEC - Passed
AUD - Passed
FAR - 10/28/14 (waiting results)
REG - Passed

[Pandarama]

Thank you rbozung. I knew I was missing something. I was disregarding the 12 trucks for some reason (realizing I'm too tired to pay enough attention to detail right now).

Thank you again!!

BEC - 80
AUD - 64, 75 - credit lost, 90!!
REG - 73, 74, 83
FAR - 61, 72, 85

Feels good finishing on my best note. Time to watch the mailbox.

[Author]

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