FAR Study Group Q4 2016 - Page 16

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    Topic
  • #836137
    jeff
    Keymaster

    Welcome to the Q4 2016 CPA Exam Study Group for FAR.

    If this is your first post in the study group – please post your target exam date (just the time frame to preserve your anonymity), and your past history with this exam (optional, of course).

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

Viewing 15 replies - 226 through 240 (of 799 total)
  • Author
    Replies
  • #1305946
    stina71223
    Participant

    did you see the second exam much different than the first? I retake FAR for my second time this week.

    #1305963
    stina71223
    Participant

    @cbuck did you see the second exam much different than the first? I retake FAR for my second time this week.

    #1305966
    stina71223
    Participant

    @lilitvar: did you take far before? if so, did you see the second exam much different than the first? I retake FAR for my second time this week.

    #1305969
    stina71223
    Participant

    @mperez102204 : did you see the second exam much different than the first? I retake FAR for my second time this week.

    #1305991
    GiniC
    Participant

    Sorry, wrong thread!!!

    #1306003
    Claudia408
    Participant

    @mckan – that's a great explanation for the notes discount. it always confuses me. how is that question different than the following? this one has a stated rate while note for Lee Co is non-interest bearing?

    On July 1, Year 1, Kay Corp. sold equipment to Mando Co. for $100,000. Kay accepted a 10% note receiv­able for the entire sales price. This note is payable in two equal installments of $50,000 plus accrued interest on December 31, Year 1 and Year 2. On July 1, Year 2, Kay discounted the note at a bank at an interest rate of 12%. Kay’s proceeds from the discounted note were:

    $50,000 + ($50,000 × 0.1) = $55,000
    $55,000 × 0.12 × 6/12 = $3,300
    $55,000 – $3,300 = $51,700

    BEC - 75 (3x)
    AUD - 78 (3x)
    REG - 67, 66, Aug 1
    FAR - 54, Sept 8

    #1306030
    GiniC
    Participant

    @claudia408 and @mckan514w

    The difference, I believe, is that a payment was made on the original $100,000 note (December 31, Year 1) before it was sold to the bank AND that this problem has an interest-bearing note. That first payment reduced the principal to $50,000; when the note was sold, it was on the basis of that $50,000 principal plus $5,000 interest due on December 31, Year 2 (which didn't exist in the other problem). The discount is calculated on the $55,000 expected future cash flow, at 12% for the six months between the date of sale and the maturity date.

    My problem with the answer to this one is that Kay's proceeds from the note were really $55,000 from the first payment PLUS $51,700 from the sale of the note, for a total of $106,700. I have problems like this with a lot of MCQs – I read the question a little differently than the writers intended!

    #1306095
    mckan514w
    Participant

    @claudia GiniC is correct on the above question. Kay does not discount the note until the middle of the second year so half the principle has been paid so the maturity value is what is left to be paid (50,000 plus the 10% interest). Since the note is sold with 6 months left to go the discount factor (12% is divided by the time left)- A trick here that helps me out is to ask myself what is the bank actually going to get out of the note– when the “ower” pays up. so in this case they will get 50K plus accrued interest. In the other question they would have gotten the full 200K.


    @GiniC
    – the reason 106.7 wouldn't be the answer is the last sentence says the proceeds from the DISCOUNTED note- the note wasn't considered “discounted” until it was sold to the bank… so it wouldn't be total proceeds from the note.

    and they ask me why I drink...

    FAR- 61-next time I'll ask for lube instead of a calculator
    REG-75- Never been so happy to see such a low grade
    BEC- 8/11
    AUD- 9/2

    #1306179
    mckan514w
    Participant

    On Retail Sales Method do you subtract out the Markdowns BEFORE coming up with your cost to retail ratio or after??? for some reason I am getting very confused on this and think I have seen it both ways…

    example

    Cost= 600
    Retail =800
    Net Mark-ups=10
    Net Mark-downs=20

    Is your ratio 600/(800+10)
    or 600/(800+10-20)
    ?????

    and they ask me why I drink...

    FAR- 61-next time I'll ask for lube instead of a calculator
    REG-75- Never been so happy to see such a low grade
    BEC- 8/11
    AUD- 9/2

    #1306389
    cpac
    Participant

    @stina71223 – my second exam was not crazy different. Still difficult but less IFRS which I was happy about. Good luck!! 🙂

    #1306396
    Anonymous
    Inactive

    Can someone please explain this to me? I just don't understand why the credit sales would be included under the cash basis of accounting…..

    The following information pertains to Eagle Co.'s 20X1 sales:

    Cash Sales
    Gross $ 80,000
    Returns and allowances 4,000
    Credit Sales
    Gross 120,000
    Discounts 6,000
    On January 1, 20X1, customers owed Eagle $40,000. On December 31, 20X1, customers owed Eagle $30,000. Eagle uses the direct write-off method for bad debts. No bad debts were recorded in 20X1. Under the cash basis of accounting, what amount of net revenue should Eagle report for 20X1?

    #1306404
    KJ
    Participant

    If I am not wrong Credit Sales does not mean company sold goods on credit it just means if customer paid it via debit/credit card, not too sure. Maybe someone else can give some insight.

    FAR - August 2016
    AUD - September 2016
    REG - October 2016
    BEC - November 2016

    Remember: "Everything should be made as simple as possible, but not simpler." - Albert Einstein

    #1306417
    mckan514w
    Participant

    @breeves94 – is the answer 200?

    You would recognize the 80,000 cash sales less 4,000 in returns and allowances

    Plus at the Beginning of the year customers owed them 40,000 throughout the year they sold 120,000 less discounts of 6,000 and at the end of the year people owed them 30,000 which means they collected 124,000 in cash from customers from credit sales
    40,000 beg balance
    +120 added during the year
    -6less discount
    -30- end balance

    So 124,000 + 80,000-4,000= 200,000 in revenues

    and they ask me why I drink...

    FAR- 61-next time I'll ask for lube instead of a calculator
    REG-75- Never been so happy to see such a low grade
    BEC- 8/11
    AUD- 9/2

    #1306510
    brian seelinger
    Participant

    Okay I took FAR today and well I have no idea what to think. All 3 testlets seemed pretty easy, no noticeable difference in difficulty so either I crushed it or am just misguided…I guess I'll find out in 4 weeks. Anyone else had a similar experience?

    #1306539
    A1lessio
    Participant

    Hey Everyone,

    Wanted to drop in. I Just took REG on Tuesday (hopefully passed) and started studying for FAR. Want to sit for the exam early to mid January. Will try and cover one chapter a week which includes lectures, writing out important parts, mcqs and writing out wrong mcqs. Maybe a few sims. This is similar to what I did for Audit.

    Brian- for Audit the testlets all seemed really easy and I went into a panic because I thought I was bombing, but ended up passing. Same for REG, but the sims were insane.

    AUD (08/02/2016)

Viewing 15 replies - 226 through 240 (of 799 total)
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