[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

[mckan514w]

WOW major props to you MScfisher doing this with kids-

I have yet to hit a “review point” emichelle… I used Roger's first go round and have re-watched one or two of the videos from there but am primarily concentrating on MCQs and getting through each section. One of my biggest problems first go round was it was my first exam and I didn't really “understand” how to process through the MCQs if that makes sense. This time I am trying to make sure that I not only understand the material but how it is being asked / how to calculate what they actually want me to calculate.

I am TRYING to put in 6 hours a day but I am so burned out on studying that its a struggle. I have yet to hit the GVT and NFP sections which gave me MAJOR MAJOR MAJOR trouble last go round but hopefully will hit those by end of the week leaving me a week of solid review time…. if I can just push through

As to never feeling ready- yeah not sure if you ever do feel ready- first time I took it I KNEW I wasn't ready but sat anyway- this time I am thinking I am never going to feel ready but at least I am comfortable with a lot of the info which I wasn't first time! GOOD LUCK to everyone– I will be THANKFUL when this is done– then maybe I can enjoy turkey and beer! ha ha ha

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 took audit 3 times before I passed. I feel your pain and I also know now that is it FAR more important to UNDERSTAND The material that to memorize it.
FAR is just soooo much material!

[mtaylo24]

Question: 7 Alp, Inc., had the following activities during the current year:

•Acquired 2,000 shares of stock in Maybel, Inc., for $26,000
•Sold an investment in Rate Motors classified as available for sale for $35,000 when the carrying amount was $33,000
•Acquired a $50,000, 4-year certificate of deposit from a bank that was classified as held to maturity. (During the year, interest of $3,750 was paid to Alp.)
•Collected dividends of $1,200 on stock investments

In Alp’s current-year statement of cash flows, net cash used in investing activities should be

A. $37,250
B. $38,050
C. $39,800
D. $41,000

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]

Question on non-monetary exchanges- if they do not say “lacks commercial substance” are we just suppose to assume that it has commercial substance??? Example I just had a question where they traded an old van and $$ for a new van- I said lacked commercial substance don't recognize gain but the answer said it HAD commercial substance because a new van would “substantially change” cash flows….

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'm going to go with D. 41,000 here Mtaylo???

Cash Outflow of 26,000 to purchase shares
Cash Outflow of 50,000 to purchase CD – interest is recognized in CF operating
Cash Inflow of 35,000 on sale of investment in Rate Moters with gain being recognized in CF Operating

Total Cash Used in Investing=
50,000+26,000-35,000=41,000

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]

McKan – Correct, you are ready to tackle the beast!

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 Mtaylo…if ONLY the entire exam was CF statements ha ha ha ha 😉

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]

Great question. I surely would have gotten that wrong….ugh

[mtaylo24]

I personally hate cash flows. They are definitely in my tier 2 hated subjects, which includes benefits/pensions and derivatives/hedging. Tier 1 of course is bonds, SH Equity, and Leases (if anyone cares).

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 I love the tiers of hating… I actually don't mind CF or Bonds…

my Tier 1 would be GOVERNMENT F___ING ACCOUNTING, Pensions, Non-monetary exchanges and Leases

with a solid Tier 2 group Anything IFRS related, Impairments and Consolidated Statements

ha ha ha ha… Okay I pretty much hate all of 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

[emichelle2321]

I fricking HATE the intercompany/consolidations with a passion. Government isn't far behind.

[AScott89]

I am right there with you. Intercompany/Consolidations, Government, Non-Monetary Exchanges, and Cash-to-Accrual are a huge pain in my ass.

BEC-65
AUD-72(8 '14); 68(11 '14)
FAR-
REG-

[Jsn3004]

The UNO Company was formed on January 2, year 1, to sell a single product. Over a 2-year period, UNO’s acquisition costs have increased steadily. Physical quantities held in inventory were equal to 3 months’ sales at December 31, year 1, and zero at December 31, year 2. Assuming the periodic inventory system, the inventory cost method which reports the highest amount for each of the following is

Inventory December 31, year 1/ Cost of sales year 2
A:LIFO FIFO
B:LIFO LIFO
C:FIFO FIFO
D:FIFO LIFO

Answer is C.I understand why why to get the highest Ending Inventory FIFO applies, but can someone please explain how FIFO will get you the highest COGS? I know it has something to do with Ending Inventory being zero.

[mckan514w]

and in the vein of hating non-monetary- seriously I CAN NOT GET THESE…

I thought you recognized the FMV that is more readily apparent…. and then your
JE would be
DR Asset Received FMV
CR Asset Given Carry
CR Gain (which is a plug)

So how do you know WHEN to use asset givens FMV or asset received FMV??? see below

A company exchanged land with an appraised value of $50,000 and an original cost of $20,000 for machinery with a fair value of $55,000. Assuming that the transaction has commercial substance, what is the gain on the exchange?

A.$0

B.$5,000

C.$30,000

Incorrect D.$35,000

Nonmonetary exchanges are generally recorded at fair value.

Value of property exchanged $50,000
Original cost 20,000
——-
Gain on exchange $30,000
Terms

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]

@jsn3004
So this is my theory in a period of rising rates FIFO normally gives you the lower cost of goods but since there's no ending inventory that would mean the purchases of inventory slowly declined over year two. So in this way you have a lot of inventory at the beginning of the year 2 and while prices are rising the level of inventory bought or still on hand decreases to zero by the end of the year. In this way fifo will still give you a higher cost of goods over lifo.
I would have chosen fifo, lifo and gotten it wrong though. …

[Author]

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