FAR Study Group Q3 2016 - Page 3

Viewing 15 replies - 31 through 45 (of 213 total)
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  • #784883
    CPYay
    Participant

    @UghCPAz & @tncincy

    Wow… that's a terribly worded question if so. I just got to to Roger's Combinations and Consolidations (last chapter… thank goodness) and it states assets should be at FV. So I would've guessed $350K as well based on the wording of that. Just did some Google searches and didn't find anything that explained their answer.

    AUD - 92
    BEC - 84
    FAR - 89
    REG - 84
    Mailed application! Hoping to be licensed by year-end!
    #784884
    jmc0434
    Participant

    Consolidations are always booked at Fair Value for the acquiring company.

    BV of In-Process R&D = 50K
    FV of In-Process R&D = 400K

    400K – 50K = 350K is the “write-up” of the in-process research and development.

    BEC - 79
    AUD - 89
    REG - 80
    FAR - 7/19/16

    #784885
    Anonymous
    Inactive

    austidan, Thanks for the answer.

    But, I am not sure why /12?

    I was thinking that I have multiple 500 * (x/12) then * 5% to get the Interest?

    Then add the other 2 to have the final capitalized interest.

    What I am not sure is the how many months to divide by 12 to get to the cumulative.

    Am I way off?

    Thanks again.

    Dlu

    #784886
    UghCPAz
    Participant

    Did any else notice in that in Becker's second practice exam for FAR, they used the historical amount to remeasure inventory on the Balance sheet, and in Becker's far book they used the WA average to measure inventory on the Balance SHeet? I know with remeasurement, non monetary items are supposed to use the historical rate on the BS…but why did Becker change how they did it in the book to how it was done in the practice exam?

    AUD - 99
    BEC - 90
    FAR - 96
    REG - 90
    Katie Thomas, CPA
    https://www.youtube.com/katiethomascpa

    Just AUD left

    #784887
    KJ
    Participant

    @ UghCPAz…I think acquisition costs are expensed in the period it incurred and will not reduce the asset account. The asset will be reported @ FMV of $400K.

    AUD - NINJA in Training
    BEC - NINJA in Training
    FAR - NINJA in Training
    REG - NINJA in Training
    "Everything should be made as simple as possible, but not simpler" - Albert Einstein

    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

    #784888
    CPA788
    Participant

    @mtaylo24 Good call. My failing scores usually added fuel to my fire and I'm just in a slump. I like your mindset. Thanks for sharing. Let's knock FAR down, then leave the 69-on-REG club behind us. PS – I def feel like 69 is -almost got it, esp with that score report. So dumb. Are you really sitting for FAR and REG on the same day??

    BEC - 74, 77 (Becker only)

    FAR - 72, 71, 78 (Becker+NINJA)

    REG - 69, 59, 69, 72, 76 (Becker+a private tutor+NINJA+Gleim free trial+seriously anything else I could review)

    AUD - 77 (Becker only)

    CA candidate

    BEC - 74, 77
    FAR - 72, 71 (retake 7/29)
    REG - 69
    AUD - Q4 '16

    CA Candidate

    #784889
    Anonymous
    Inactive

    kanwal78, I noticed you scheduleded your exams 1 month apart, how are you able to study and be ready for it so quickly?

    I need like 8 – 10 weeks for each subject. Care to share your process?

    Thanks,

    Dlu

    #784890
    mtaylo24
    Participant

    @CPA788 – I'm still trying to figure out scheduling. I paid for REG, not FAR, but I'm studying for FAR (makes no sense). I figure I would dive into to this first since it was new materials and I have been through the other sections. I've been approved for FAR, just too lazy to pay for it. I want to take both in Aug 2016, not sure what days yet. But I only plan to put 2 -3 weeks into my REG retake. What are your plans for the window?

    CPA (2017)

    REG:  75

    BEC:  76

    FAR:  77

    AUD: 78

     

    CMA (2019)

    P1: 380

    P2: 360

    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)

    #784891
    JakeISU16
    Participant

    Does anyone feel like the Becker F9 simulations contain a lot of material not covered in the text book. I did really good on MCQ's but awful on the sims.

    B - TBD
    A - (8/3/16)
    R - 81 (5/24/16)
    F - (7/18/16)

    #784892
    se7en.14
    Participant

    In a cash & cash equivalents question, when they ask “what amount should be reported as cash? “
    Does it mean you should be looking on the checkbook balance? and not the bank balance?

    Thanks.

    .
    #784893
    Titleistg0lfer
    Participant

    I usually look at this as taking the Bank Balance and adding deposits in transit and subtracting checks outstanding.

    REG: 84 (10/5/15)
    AUD: 83 (11/23/15)
    BEC: 77 (2/27/16) - The bubble sucks
    FAR: 90 (7/20/16) - AND DONE FOREVER!!!!!

    #784894
    thebigguy1992
    Participant

    Leer Corp.’s pretax income in the current year was $100,000. The temporary differences between amounts reported in the financial statements and the tax return are as follows:

    Depreciation in the financial statements was $8,000 more than tax depreciation.
    The equity method of accounting resulted in financial statement income of $35,000. A $25,000 dividend was received during the year, which is eligible for the 80% dividends-received deduction.
    Leer’s effective income tax rate was 30%. In its current year income statement, Leer should report a cur­rent provision for income taxes of:

    answer is 23,400. anyone know why? Why are we adding depreciation and subtracting equity income?

    BEC - 79
    FAR - 62,73,76
    AUD - 70, 88
    REG - 83
    #784895
    KJ
    Participant

    @ Dlu..I am giving myself 5-6 weeks to prepare for any exam. I took FAR in June and failed it, I studied for 8-9 weeks and I think it was way too long and started to forget half the material. Well, right now this is my plan but if I fail any exam obviously I will have to switch around my dates. I am not in accounting field or smart as lot of people out there but I just don't want to linger this for too long and trying to finish it by end of this year, so let's see how it goes.

    AUD - NINJA in Training
    BEC - NINJA in Training
    FAR - NINJA in Training
    REG - NINJA in Training
    "Everything should be made as simple as possible, but not simpler" - Albert Einstein

    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

    #784896
    lolo
    Member

    @thebigguy1992, they are asking about current income tax expense which basically what you need is that to know the income return tax basis and multiply it by the tax rate! 100,000 + 8000 (Dep.exp higher in F/S which means higher income tax basis) – 30,000 (Dividend income recognized based on the tax basis is only 5,000 and the recognized amount on F/S is 35,000) = 78,000 (income return tax basis) * 30% = 23,400$.

    AUD - 95
    BEC - 87
    FAR - 93
    REG - 87
    My nick name is Sunshine but the fact is that I have never been in touch with it since I started studying for this CPA exam. I KNOW It HURTS!

    My Nick name is sunshine, but the fact is I have not been in touch with it since I started this CPA exam! IT HURTS

    AUD - ✔ Passed Becker self study!
    BEC - ✔ Passed Becker self study!
    FAR - ✔ Passed Becker self study!
    REG - TBD

    #784897
    thebigguy1992
    Participant

    Ace Co. sold to King Co. a $20,000, 8%, 5‑year note that required five equal annual year-end payments. This note was discounted to yield a 9% rate to King. The present value factors of an ordinary annuity of $1 for five periods are as follows:

    8%: 3.993
    9%: 3.890
    What should be the total interest revenue earned by King on this note?

    The first thing one needs to answer this question is the annual payment needed to pay the note. Because the note yields a higher rate (9%) than it pays (8%), the note should have a discount. Since the note has a stated rate of 8%, the annual payments will be based on the present value of an ordinary annuity based on the 8%: Thus, the annual payment is $20,000 ÷ 3.993, or $5,009 annually.

    The present value of the note, however, and thus the initial discount is based on the yield percentage of 9%. Therefore, the note's initial present value is the payment amount multiplied by 3.89 ($5,009 × 3.89), or $19,485.

    The total amount of interest revenue one earns on a note is related to the total payments and also the present value of the note, with a discount recognized here initially, on this note. The total amount to be received on this note is 5 × $5,009, for a total of $25,045.

    Interest is generally the amount returned over and above the amount originally recognized, which was the $19,485 originally. Thus, the total interest revenue is $25,045 − $19,485, or $5,560.

    Can anyone tell me why to find the annual payment you divide by the PV of an OA for 8% and not 9%? I thought to find the PV of a bond, ether it be the principal or the interest rate, that you take the pv of $1 @yield?

    BEC - 79
    FAR - 62,73,76
    AUD - 70, 88
    REG - 83
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