[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

[Gabe]

Thanks! You too

CPA, CFE
CISA- Experience will be completed by August 2016

[Determined CPA]

On October 1 of the current year, a U.S. company sold merchandise on account to a British company for 2,000 pounds (exchange rate: 1 pound = $1.43). At the company's December 31 fiscal year-end, the exchange rate was 1 pound = $1.45. The exchange rate was 1 pound = $1.50 on collection in January of the subsequent year. What amount would the company recognize as a gain (loss) from foreign currency translation when the receivable is collected?

Answer:

The company would recognize a $100 gain:

January (2,000 pounds x $1.50) $3,000

December (2,000 pounds x $1.45) 2,900

---

Gain $ 100

my question is why isn't the gain $140 (2000 *(1.43-1.50))? Is there any situation where we would be required to use the original rate of 1.43?

A - 75
B - 78 God is good.
F - 77 Answered prayers.
R - 84! Done!!

Paperwork sent - waiting for license!!
Still on a cloud and in shock. Through God, all things will happen.

[Gabe]

If they were asking for the amount at 12/31 you would use $1.43-$1.45. However, they asked what the gain was when the receivable was collected.

CPA, CFE
CISA- Experience will be completed by August 2016

[Determined CPA]

So the gain/loss always uses YE rates when asking when it's collected? Ok, guess that makes sense.

A - 75
B - 78 God is good.
F - 77 Answered prayers.
R - 84! Done!!

Paperwork sent - waiting for license!!
Still on a cloud and in shock. Through God, all things will happen.

[Gabe]

If they asked what the G/L was for YE, use spot rate-YE rate.

However, they asked for the G/L in the year received…so YE rate- rate when received.

CPA, CFE
CISA- Experience will be completed by August 2016

[mb0363]

@OnMyWay732 thank you! that makes sense!

On September 22, Year 4, Yumi Corp. purchased merchandise from an unaffiliated foreign company for 10,000 units of the foreign company's local currency. On that date, the spot rate was $.55. Yumi paid the bill in full on March 20, Year 5, when the spot rate was $.65. The spot rate was $.70 on December 31, Year 4. What amount should Yumi report as a foreign currency transaction loss in its income statement for the year ended December 31, Year 4?

a. $0

b. $1,000

c. $1,500

d. $500

This question was one that threw my understanding off because you take .7 – .55. However, its because all these rates happened within one year correct?

BEC - PASS
AUDIT - PASS
REG - PASS
FAR - PASS

[Determined CPA]

ok thank you!

A - 75
B - 78 God is good.
F - 77 Answered prayers.
R - 84! Done!!

Paperwork sent - waiting for license!!
Still on a cloud and in shock. Through God, all things will happen.

[mb0363]

@gabe Determined CPA ha! looks like we were confused on the same thing. thanks everyone for your help!

BEC - PASS
AUDIT - PASS
REG - PASS
FAR - PASS

[OnMyWay732]

@Determined – if you ever wind up dealing with hedge funds, stock trading etc, there's something called Mark to Market, which Becker actualyl covers a bit. Basically at year end you are marking your securities to fair value. In essense this problem is talking about a forward currency contract.

At December 31 Year 1, he is marking the forward to FV and that's the carrying value now. So next year, this is the new base to what you compare to.

AUD - July 2014 - 76
REG - August 2014 - 82
FAR - November 2014 - 78
BEC - January 2015 - 81

DONE!!!!

Used Becker online. Who needs a text when you can burn your eyes out staring at the screen for months on end?

"Let me tell you something you already know. The world ain't all sunshine and rainbows. It is a very mean and nasty place and it will beat you to your knees and keep you there permanently if you let it. You, me, or nobody is gonna hit as hard as life. But it ain't how hard you're hit; it's about how hard you can get hit, and keep moving forward. How much you can take, and keep moving forward. That's how winning is done!"

[Gabe]

@onmyway exactly

CPA, CFE
CISA- Experience will be completed by August 2016

[Determined CPA]

Thank you OnMyWay732 and Gabe! I feel like I'm always getting confused with silly things like that. I hope this week of review really makes this info click at some point – this is worse than BEC, hands down – and I HATED BEC

A - 75
B - 78 God is good.
F - 77 Answered prayers.
R - 84! Done!!

Paperwork sent - waiting for license!!
Still on a cloud and in shock. Through God, all things will happen.

[Nute]

@ that question.

They are testing that you know that you must take the gain as of December 31 financial statements which is(1.43-1.45) or ($40).

Then there is another gain in January of the next year (1.45-1.50) or $100.

FAR is all about those little details.

Passed All Four Exams!

Best Exam Advice (came from a fortune cookie after I got a 74 on my first exam):
"Study and prepare yourself and one day, your day will come"

That day came on June 9th, 2015

Licensed NJ CPA

[Gabe]

I hated BEC too, so glad it is over..I take FAR tomorrow and I plan on NEVER taking it again. I AM TAKING YOU DOWN FAR

CPA, CFE
CISA- Experience will be completed by August 2016

[OnMyWay732]

I hope BEC is a cakewalk…but I know it won't be. That's my next (and hopefully last) one – if I can get through this tomorrow. I was just telling my non-accounting friends – I literally feel like i have smoke coming out of my ears at this point. He laughed. I was serious.

AUD - July 2014 - 76
REG - August 2014 - 82
FAR - November 2014 - 78
BEC - January 2015 - 81

DONE!!!!

Used Becker online. Who needs a text when you can burn your eyes out staring at the screen for months on end?

"Let me tell you something you already know. The world ain't all sunshine and rainbows. It is a very mean and nasty place and it will beat you to your knees and keep you there permanently if you let it. You, me, or nobody is gonna hit as hard as life. But it ain't how hard you're hit; it's about how hard you can get hit, and keep moving forward. How much you can take, and keep moving forward. That's how winning is done!"

[mb0363]

@gabe great attitude! i truly believe confidence plays a huge role in these exams. I went into far last time TERRIFIED, opened my first testlet, didn't know the first few problems…. and it all went downhill from there.

BEC - PASS
AUDIT - PASS
REG - PASS
FAR - PASS

[Author]

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