[jeff]

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

[afrieband16]

@MMAFEM

when using the treasury stock method you assume that the warrants are exercised and the proceeds from the exercising of the warrants are used to buy treasury stock at the average market price. this question is asking for in the incremental number of shares that will be added to the denominator which is calculated as the difference between common stock issued and the theoretical purchase of treasury stock (@ average market price)

I'm confused how they got 8000 though because this is how I thought it was calculated (but I can't seem to get it right)

proceeds from exercising the warrants: 20,000 * 20 = 400,000

purchase of treasury stock with those proceeds: 400,000/25 = 16,000

incremental shares to add to denominator: 20,000 c/s issues – 16,000 treasury stock = 4,000 shares

can someone else figure this one out, it's driving me nuts now haha

i think i am doing something wrong and I think the terminology is mixing me up

[mckan514w]

I hope someone has an answer to this- I am actually getting that the number of stocks would increase to 4,000

They exercise 20,000@ 20 for a total of 400,0000 which they can then re-buy at $25 which equates to 400,000/25 16,000 shares and then 20,000-16,000 is a 4,000 increase in common shares outstanding…

I agree with MMAFEM what am I missing here?

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

[mckan514w]

ha @afrieband16 we must have posted at same time– I am getting the same thing you are and am VERY confused by the 8,000…. and now I am going crazy…

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

[mckan514w]

I think that either the answer is wrong or the question is missing something because I found this question that is similar and the answer works out “right”

Warrants exercisable at $15 each to obtain 25,000 shares of common stock were outstanding during a period when the average and year-end market price of the common stock was $30. Application of the treasury stock method for the assumed exercise of these warrants in computing diluted earnings per share will increase the weighted-average number of outstanding common shares by a. 5,000 b. 10,000 c. 11,000 d. 12,500

Correct Answer D.

$15*25,000=375,000
375,000/30= 12,500
25,000-12,500= 12,500

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

[Operation_CPA]

Casey Corp. entered into a troubled debt restructuring agreement with First State Bank. First State agreed to accept land with a carrying amount of $85,000 and a fair value of $120,000 in exchange for a note with a carrying amount of $185,000. Disregarding income taxes, what amount should Casey report as a gain in its income statement?

My JE:

N/P 185
……….Land 85
……….Gain (Land) 35
……….Gain (restructuring) 65

Answer: 65,000. For these types of questions where the question stem does not specify which gain they are referring to, is it safe to assume they are just asking for the gain on restructuring? Because I would have chosen an answer of 100,000 recognizing both the gain on restructuring (65) and gain on transfer of land (35). Any insight would be great, thanks!

[mckan514w]

@operation_CPA– I think I remember that in a debt restructure the g/l on land is a balance sheet item where the G/L on the NP is an income statement one which would be what you would recognize here… I can't remember exactly though and if I come across it again I will post…

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

[lilitvar]

Does anyone know how to “unsubscribe” from getting emails for this forum replies?
Thanks

[mtaylo24]

Week 2! 900+ questions until review phase in Ninja. Broke out Gleim audios over the weekend, and worked ch 1 & 2 MCQs. Hoping that Thanksgiving doesn't disrupt the pace. Happy Monday!

AUD - 1st - 60 (12/12), 61 (2/13), 61 (8/13), 78! (11/15)
REG - 55 (2/16) 69 (5/16) Retake(8/16)
BEC - 71(5/16) Retake (9/16)
FAR - (8/16)

[mckan514w]

Mtaylo – T-giving is totally killing me this close to exam date- ugh… aren't you waiting on a score tonight?? (REG??) if so GOOD LUCK!

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

[mtaylo24]

^^^Trying not to think about that! Also, I just checked my sister's itinerary since she is flying in from the west coast. She is here like 9 days through 12/9. If I'm not comfy by next Wednes, I might just have to reschedule!

AUD - 1st - 60 (12/12), 61 (2/13), 61 (8/13), 78! (11/15)
REG - 55 (2/16) 69 (5/16) Retake(8/16)
BEC - 71(5/16) Retake (9/16)
FAR - (8/16)

[mckan514w]

lol sorry to have brought it up 🙂 next wed is my drop dead date too- If I am not where I feel I need to be… all though part of me says go ahead and take it on the 9th and let the chips fall where they may and maximize my chances to sit before April…. Lord this is stressful enough without adding the extra scheduling stress to it!!!

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

[Mscfisher]

Mckan514w i am right there with you! I'm studying all through thanksgiving dinner and evening. I need to be ready by next Wednesday. But either way i will still take it on the 9th.

[emichelle2321]

How many hours are you guys putting in per day during your final review?? And are any of you who are testing soon using Becker? It seems like most of the people posting at this point are using Ninja. Just curious. Happy studying! My test is on the 8th, I couldn't feel any more more stressed out at this point….bleh.

[Mscfisher]

@emichelle2321 i am attempting 4 to 5 hrs a day. I also work full time and have 2 kids so i am getting 4 solid hours of sleep each night.I an using Becker. I think the ninja is a great supplement but i have 4 more chapters in Becker to go so I'm not adding to my plate.

[emichelle2321]

@mscfisher – I work full time as well this has proven so difficult because I sit at my desk and all I want to do is study! I cannot imagine having two kids on top of it, major props to you.

I have gone through all the Becker chapters except F10 – so now my plan is to do F10 today, then start the final review and go through each chapter day by day until I am getting at least 80% on progress tests. After that point I am going to do the two practice exams and find my weak points and if I stay on my schedule, that means I should have 4-5 days to go back and refine until my test and work some SIMS. Hopefully I have the mental capacity to get through this all. I have a feeling I will never feel ready for this test.

When is your test?

[Author]

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