[jeff]

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

[Peterman25]

@aspiring..

Ugh..that question is ridiculous and I would have gotten it wrong if I had it on an exam today. I had to look it up.

My original thought process – General fund = modified accrual so the accounting may not be perfect. The ending receivables was the deferred revenue, but I wasn't sure how the 6/30 receivables came into play or if the allowance was netted against it. My first guess was C.

The answer is A. Ending receivables – receivables collected in the 60 days after the end of the period – allowance = 415,000

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

AZ license - Official 8/20/2015

[Anonymous]

Does anyone have a good method to prepare for the JE's? It's been quite some time since I've taken accounting courses in college and do not have any more of those textbooks. I have Becker but I don't feel they prepare me well in terms of JE's. Any advice would be appreciated.

[Peterman25]

government accounting will be the death of me.

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

AZ license - Official 8/20/2015

[Anonymous]

I don't think this question gave you enough information. Why is C an okay answer but B is not?

---

Cancer Educators, a not-for-profit entity, incurred costs of $10,000 when it combined program functions with significant fundraising functions. Which of the following cost allocations might Cancer report in its statement of activities?

A. Program services: $0; Fundraising: $0; General services: $10,000

B. Program services: $0; Fundraising: $6,000; General services: $4,000

C. Program services: $6,000; Fundraising: $4,000; General services: $0

D. Program services: $10,000; Fundraising: $0; General services: $0

C. FASB ASC 958-720-45-29 through 45-37 states that joint costs should be allocated between fundraising and the appropriate program or management and general function if three criteria are met. Otherwise, all of the joint costs should be considered fundraising costs (not one of the answer choices given). The criteria are purpose, audience, and content. The purpose of the joint activity must include accomplishing program or management and general functions, with a specific activity by the audience and a specific activity by the recipient to that end. If the criteria are not met, all the costs are considered fundraising costs. Fundraising activities that are incidental to program or management and general activities would not require all costs to be considered fundraising costs or to be allocated.

[Anonymous]

@Determined_To_Succeed

I believe it has to be C because the non-for-profit incurred $10,000 when combining its “program” and fundraising functions. No where in the question are general services mentioned.

[Anonymous]

Governmental Acccounting is killing me too. Just did a set of 30 MCQ of just NFP/Gov't and not feeling particularlly great.

[cpaherewego]

I need help understanding this question.

Which of the following qualifies as a reportable operating segment?

A. Corporate headquarters, which oversees $1 billion in sales for the entire company

B. North American segment, whose assets are 12% of the company's assets of all segments, and management reports to the chief operating officer

C. South American segment, whose results of operations are reported directly to the board of directors, and has 5% of the company's assets, 9% of revenues, and 8% of the profits

D. Eastern Europe segment, which reports its results directly to the manager of the European division, and has 20% of the company's assets, 12% of revenues, and 11% of profits

I thought D would be the answer. The answer ended up being B. Why is D not also a choice.

I thought the rules for segment reporting were

10% of Revenue

10% of Profit/Loss

10% of Combined Assets

Then you add them all up until you get to 75% of the total company. What am I missing?

TIA

FAR - 10/13(retake)
AUD - TBD
BEC - TBD
REG - TBD

You can do anything you put your mind too!!!

[Juliemiddle]

@cpaherewego – Operating segments must have three characteristics.

1. The segment is involved in revenue producing and expense incurring activities.

2. The operating results of the segment are reviewed by the company's chief operating decision maker on a regular basis.

3. There is discrete financial information available for the segment.

The COO piece is the key to answering your question. Good question!

AUD: 84 - Oct. 2013
BEC: 83 - Feb. 2014
REG: 91 - May, 2014
FAR: 68, 96 - Oct. 2014...DONE

CPAExcel, Ninja Audio (all sections)

[cpaherewego]

@Juliemiddle – One of the tricks my accounting professors years ago (graduated in 2007) was the 10/10/10/75 rule. I must have forgotten the other part of the segment reporting. Thank you for your help!!

FAR - 10/13(retake)
AUD - TBD
BEC - TBD
REG - TBD

You can do anything you put your mind too!!!

[Juliemiddle]

I feel like that's how it goes for every.single.topic. Here are the “basic” rules. But, here are a few more rules. And remember the rules for these 10 exceptions to the rules. Arrrgh.

AUD: 84 - Oct. 2013
BEC: 83 - Feb. 2014
REG: 91 - May, 2014
FAR: 68, 96 - Oct. 2014...DONE

CPAExcel, Ninja Audio (all sections)

[Anonymous]

@cpaherewego

I'm confused as well as how D is not also a correct choice since those categories are all over 10%. Also, why is the answer for the question below D? It multiples the 2001 and 2002 costs by 6%, whereas it should report the 2002 costs by only 4%, not 6%. Am I right in thinking this way??

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During 20X1, Gum Co. introduced a new product carrying a 2-year warranty against defects. The estimated warranty costs related to dollar sales are 2% within 12 months following the sale and 4% in the second 12 months following the sale. Sales and actual warranty expenditures for the years ending December 31, 20X1 and 20X2, are as follows:

Sales Actual Warranty Expenditures

---

---

20X1 $150,000 $2,250

20X2 250,000 7,500

---

---

$400,000 $9,750

======== ======

What amount should Gum report as estimated warranty liability in its December 31, 20X2, balance sheet?

A. $2,500

B. $4,250

C. $11,250

D. $14,250

Estimated warranty expense (20X1 sales) = .06 x $150,000 = $ 9,000

Estimated warranty expense (20X2 sales) = .06 x $250,000 = 15,000

---

Total estimated warranty expense $24,000

Less actual warranty expenditures 9,750

---

Estimated warranty liability on December 31, 20X2 $14,250

=======

[cpaherewego]

@Determined_To_Succeed – The reason for the 6% both years is because in total the warranty cost is going to be 6 %. The year of the sale 4% plus the year after the sale 2% for a total of 6%. You still need to know that your total liability is for both years to know what your liability at the end of the second year.

FAR - 10/13(retake)
AUD - TBD
BEC - TBD
REG - TBD

You can do anything you put your mind too!!!

[Anonymous]

Ah, I see. Thanks man.

[rbozung]

I have two questions for this one: 1.) Why isn't the tax rate of 30% applied to the first two years and 25% applied to the last year? 2.) Isn't income for tax purposes LESS than for book purposes in the amount of $650k hence the Deferred tax liability? They state in the answer the other way around.

correct answer given was C.

Question #10 (AICPA.911138FAR-P1-FA)

Mill, which began operations on January 1, 2003, recognizes income from long-term construction contracts under the percentage-of-completion method in its financial statements and under the completed-contract method for income tax reporting.

Income under each method follows:

Year Completed-contract Percentage-of-completion

2003 $ – $300,000

2004 $400,000 $600,000

2005 $700,000 $ 850,000

The income tax rate was 30% for 2003 through 2005. For years after 2005, the enacted tax rate is 25%. There are no other temporary differences. Mill elected early application of FASB Statement No. 109, Accounting for Income Taxes. Mill should report in its December 31, 2005 balance sheet, a deferred income tax liability of

A. $87,500

B. $105,000

C. $162,500

Total income for the three years under the two methods is:

Percentage-of-completion: $1.75mn ($300,000 + $600,000 + $850,000)

Completed-contract: $1,100,000 ($400,000 + $700,000)

Difference $650,000

This difference is also the future difference in earnings to be recognized under the two methods, because both methods ultimately recognize the same total amount of income. Completed contract (for tax purposes) will recognize $650,000 more income than percentage of completion (for book purposes) after 2005. Therefore, the difference is taxable and gives rise to a deferred tax liability of $162,500 ($650,000 x .25). The future enacted tax rate is applied, because that is the rate at which the deferred tax liability will be paid.

D. $195,000

BEC - Passed
AUD - Passed
FAR - 10/28/14 (waiting results)
REG - Passed

[Juliemiddle]

@rbozung – The question is asking what the liability should be on 12/31/2005. Your thought process of using the 30% rate would utilize the current rates for the years of revenue differences. But, you have to use FUTURE tax rates for the period in which Tax revenue will be greater than Book revenue (in other words, the tax rate in the years you WILL BE taxed).

To consider this in a different way, assume that you didn't know about the 25% in 2003 & 2004. However, the ending liability still needs to be $650k x 25% at 12/31/05, because $650k is the future taxable revenue difference. So, the adjustment to Tax Expense is a plug of whatever it needs to be to make the ending Deferred Tax Liability balance equal to $162.5k.

I hope that explanation makes sense :-/

AUD: 84 - Oct. 2013
BEC: 83 - Feb. 2014
REG: 91 - May, 2014
FAR: 68, 96 - Oct. 2014...DONE

CPAExcel, Ninja Audio (all sections)

[Author]

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