FAR Study Group Q4 2014 - Page 24

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    Topic
  • #188294
    jeff
    Keymaster

    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!

    AUD - 79
    BEC - 80
    FAR - 76
    REG - 92
    Jeff Elliott, CPA (KS)
    NINJA CPA | NINJA CMA | NINJA CPE | Another71
Viewing 15 replies - 346 through 360 (of 1,629 total)
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  • #627654
    Anonymous
    Inactive

    OCI would be a loss of 20,000 in year one and gain of 30,000. The accumulated OCI would be a gain of 10,000.

    #627655
    Anonymous
    Inactive

    Can someone explain this question to me.

    Ute Co. had the following capital structure during Year 1 and Year 2:

    Preferred stock, $10 par, 4% cumulative, 25,000 shares issued and outstanding $250,000

    Common stock, $5 par, 200,000 shares issued and outstanding 1,000,000

    Ute reported net income of $500,000 for the year ended December 31, Year 2. Ute paid no preferred dividends during Year 1 and paid $16,000 in preferred dividends during Year 2. In its December 31, Year 2, income statement, what amount should Ute report as basic earnings per share?

    a.$2.50

    b. $2.45

    c.$2.48

    d.$2.42

    Explanation

    Choice “b” is correct. $2.45 earnings per share.

    Year 1 Year 2

    Net income $ ? $ 500,000

    Less: Cumulative preferred Stock dividend “requirement” ($10 par × 25,000 shs × 4%) (10,000) (10,000)

    Income available to common shares 490,000

    Divide by average common shares O/S ÷ 200,000

    Basic earnings per common share $ 2.45

    Note: Since the preferred stock dividends are cumulative, when they are declared or paid is not relevant.

    My question is why didn't we subtract $20,000 from net income. The cumulative dividend for 2 yrs is 20000.

    #627656
    Anonymous
    Inactive

    Finch Co. reported a total asset retirement obligation of $257,000 in last year’s financial statements. This year, Finch acquired assets subject to unconditional retirement obligations measured at undiscounted cash flow estimates of $110,000 and discounted cash flow estimates of $68,000. Finch paid $87,000 toward the settlement of previously recorded asset retirement obligations and recorded an accretion expense of $26,000. What amount should Finch report for the asset retirement obligation in this year’s balance sheet?

    $238,000

    $264,000

    $280,000

    $306,000

    Baker Co. sells consumer products that are packaged in boxes. Baker offered an unbreakable glass in exchange for two box tops and $1 as a promotion during the current year. The cost of the glass was $2.00. Baker estimated at the end of the year that it would be probable that 50% of the box tops will be redeemed. Baker sold 100,000 boxes of the product during the current year and 40,000 box tops were redeemed during the year for the glasses. What amount should Baker accrue as an estimated liability at the end of the current year, related to the redemption of box tops?

    $0

    $5,000

    $20,000

    $25,000

    #627657
    Anonymous
    Inactive

    CPAHOPEFUL11 –

    B: $264,000

    B: $5,000

    #627658
    Peterman25
    Participant

    CPAHOPEFUL – yes the answer is B

    BEC 7/14 - PASS
    FAR 10/14 - PASS
    AUD 1/15 - PASS
    REG 4/15 - PASS

    AZ license - Official 8/20/2015

    #627659
    Peterman25
    Participant

    caak –

    When calculating the basic EPS the preferred dividend is only cumulative for purposes of paying out cash. When you are calculating basic EPS for the current period it is only the preferred div for that period.

    BEC 7/14 - PASS
    FAR 10/14 - PASS
    AUD 1/15 - PASS
    REG 4/15 - PASS

    AZ license - Official 8/20/2015

    #627660
    ThumbsUp
    Participant

    I'm at a pace of about 1 lecture a week, is this to slow? I'm currently on F2 and plan on taking the test Nov. 26th.

    AUD- 22, Just missed it...maybe next time!
    REG- 14, so close!!!

    #627661
    Anonymous
    Inactive

    To expand on PS, if it is cumulative and convertible, you do NOT substract it from the diluted eps calculation, right?

    #627662
    Anonymous
    Inactive

    @ Thumbsup everyone goes at a different pace. Place more important on the quality of time you are spending going trough questions/material. Don't get caught up counting how many questions/lectures you do. Its about you learning and understanding what you are going though. You should be fine, just make sure you are understanding concepts

    #627663
    Anonymous
    Inactive

    Hello everyone! New to the forum here..been studying for FAR for the last month or so and plan on sitting mid-November. This will be my first time sitting for any section. I'm using Roger along with NINJA Audio and MC.

    Any words of wisdom would be much appreciated! 🙂

    #627664
    Anonymous
    Inactive

    Do you also have the WTB? That would be great help to go along with the Ninja MCQ. You will notice a lot of the questions are the same, but Ninja MCQ is formatted how you will see them on the exam. Just continue to browse this thread from time to time as one of your questions may be answered by someone.

    #627665
    Anonymous
    Inactive

    My exam is on the 1st, and I have yet to look at the Franchisee/Franchisor section along with the Real Estate section. Any quick overview on what I should be familiar with?

    #627666
    Anonymous
    Inactive

    Blue City has a major garage facility used by the Public Works department to maintain the streets and roads equipment. The garage was built 10 years ago and was expected to meet the city's needs for 30 years. The City has been updating its equipment fleet and unexpectedly discovered that the service bays are no longer adequate for many of the new vehicles, which are much larger. The sudden obsolescence of the building has been evaluated as an impairment cost. This impairment should be reported in the financial statements as:

    A.

    a program expense (Public Works) in the statement of activities and an expenditure in the general fund (Public Works).

    B.

    a program expense (Public Works) in the statement of activities, but not as an expenditure in the general fund.

    C.

    not as an expense in the statement of activities, but as an expenditure in the general fund (Public Works).

    D.

    neither as an expense in the statement of activities nor as an expenditure in the general fund.

    Rill Co. owns a 20% royalty interest in an oil well. Rill receives royalty payments on January 31 for the oil sold between the previous June 1 and November 30, and on July 31 for oil sold between the previous December 1 and May 31. Production reports show the following oil sales:

    June 1, 20X1 – November 30, 20X1 $300,000

    December 1, 20X1 – December 31, 20X1 50,000

    December 1, 20X1 – May 31, 20X2 400,000

    June 1, 20X2 – November 30, 20X2 325,000

    December 1, 20X2 – December 31, 20X2 70,000

    What amount should Rill report as royalty revenue for 20X2?

    Select an answer:

    A.

    $140,000

    B.

    $144,000

    C.

    $149,000

    D.

    $159,000

    #627667
    Peterman25
    Participant

    Thumbs – it took me a month to get through all of the video lectures for Roger. That's watching them in full and taking notes the entire time. Quality over quantity.

    BEC 7/14 - PASS
    FAR 10/14 - PASS
    AUD 1/15 - PASS
    REG 4/15 - PASS

    AZ license - Official 8/20/2015

    #627668
    Peterman25
    Participant

    @CPAHOPEFUL

    franchisor/franchisee – I remember being pretty straightforward. franchisor doesn't recognize any fee revenue until contract stipulations to recognize it have been fulfilled or significantly fulfilled.

    real estate? as in what to capitalize for land and buildings?

    BEC 7/14 - PASS
    FAR 10/14 - PASS
    AUD 1/15 - PASS
    REG 4/15 - PASS

    AZ license - Official 8/20/2015

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