[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

[CPAfit]

@rbozung thanks

AUD - 82
BEC - 78
FAR - 78
REG - 83

HIYA!

NH Licensed CPA - Jun 2018

[rbozung]

On Jeff's NINJA notes, under Capital leases, he has the JE for lease payments by the LESSEE as a DR. to interest expense and a CR to cash or lease payable. This confused me since at the beginning of the lease you DR. an Asset and CR a capital lease liability and eventually that liability has to go away. Shouldn't there also be a DR. to the Capital lease liability account (let's say for $800), a DR to interest exp (say for $200) and CR to lease payable for $1k? One of my MCQs seems to confirm my belief. It seems like such an essential element to leave out, though, so I just want to confirm that I am not missing anything:

Question #6 (AICPA.911134FAR-TH-FA)

Jay's lease payments are made at the end of each period. Jay's liability for a capital lease would be reduced periodically by the

A. Minimum lease payment less the portion of the minimum lease payment allocable to interest.

Each lease payment includes interest based on the lease liability at the beginning of the period. The amount of each payment exceeding the interest component is the amount of principal reduction. This amount reduces the lease liability used to compute the interest portion of the next payment.

Thus, the interest component decreases with each payment as more principal is paid off.

B. Minimum lease payment plus the amortization of the related asset.

C. Minimum lease payment less the amortization of the related asset.

D. Minimum lease payment.

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

[rbozung]

@JulieMiddle,

Did you ever find out about the capitalized expenditures in governmental accounting (you mentioned that they should all be expensed and I thought so too)? I just got a similar question and I am stumped…

Question #4 (AICPA.083771FAR-SIM)

A local citizen donated land and an office complex to a city with the stipulation that net income from the office complex be used help finance the operations of a teenage alcohol and drug treatment center. At the time of donation, the property's fair market value was $800,000. The donor paid $500,000 for the land and house twenty years ago. The country spent $125,000 to upgrade the office complex. The city would capitalize the land and office complex in its permanent fund at:

A. $0

Permanent Funds account for the receipt of the endowment principal that is donated to a government and is to be held in trust for the benefit of the government (or of its citizenry as a whole) as revenue. The property should be capitalized at $925,000-fair market value at the time of donation ($800,000) plus the cost of improvements ($125,000) made by the city. Earnings from the office complex would usually be transferred to and expended through a Special Revenue Fund.

B. $500,000

C. $625,000

D. $925,000

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

[Juliemiddle]

@rbozung – omgosh, that's the exact same question I was stuck on. No, I never got a definitive explanation. The study text doesn't explain this at all, and the answer's explanation doesn't really, either. Frustrating…Govt. Accounting is killing me.

Oh, thank you for the IFRS Contingent Liability vs. Provision link…it was really helpful! When is your exam?

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

CPAExcel, Ninja Audio (all sections)

[rbozung]

@julie. October 28th is my exam. I asked a professor at CPA excel about the Governmental accounting and waiting to hear back. I am on a thread that he responded to earlier and this seemed to help me a little but then I read the question again and I am not sure:

“Since the governmental funds are ‘current' funds – that is, they report only current assets and current liabilities – we do not record actual capital assets or actual long-term debt in the governmental funds. We do, however, record the transactions related to the capital assets and/or long-term debt as those transactions do typically involve current assets and/or liabilities. And since we do report the actual capital assets and actual long-term debt on the face of the Government-wide Statements, we do need to record the assets and liabilities somewhere”

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

[Anonymous]

I don't recall Becker ever mentioning anything about the Permanent Fund capitalizing assets, can anyone confirm this?

[yacobkahsai]

I am taking FAR in 2 weeks. I'm almost done with studying the chapters, currently on chapter 10…This is my first test and idk what to expect. I will start my review in a couple of days. However, I don't know where to start because I really feel as I forgot everything I learned already. I'm using Becker, How do you guys think I should review. I am very nervous and don't feel like I am ready at all. Also, I've been scoring very low in the SIM's….how do you guys think I should study? I really want to get over FAR the first time. Any advice??

[Juliemiddle]

@yacob – No worries. Everyone feels like they've forgotten everything they studied by the time they finish their first pass. You've slowly been reading each lesson and taking notes. But once you're done with the first review, it's all about looking at as much material as possible everyday. In other words you want to “touch” everything as often as possible, so the information stays current & fresh in your brain. I few things I do…

->Start with pg. 1 of the notes you took. Re-read a few topics at a time, and then start hammering out all the MCQs you missed along the way of your 1st review.

->Make flashcards of the items that you're still getting wrong & any topics that you feel shaky on.

->Once you've gone through all the material the 2nd time, make a day of finishing flash cards, making charts, graphs…whatever helps you learn…and then actually reviewing them.

->Now, time for review #3…start all over again at the beginning. More MCQs and incorporate SIMS that you didn't score well on. Practice lots of SIMS – especially ones that you have to make JEs on. Practice flashcards everyday.

->Make sure to take a practice CPA exam a few days before your exam. The items you score weakest on are the areas you're going to keep hammering until exam day.

It's a ton of work…But, the passing grade will make it worth it. I learned the hard way that you have to study right or risk not passing.

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

CPAExcel, Ninja Audio (all sections)

[Anonymous]

In regard to this question I posted…Julie I'm not sure the answer because my coworker let me borrow his Becker final review book and it doesn't have the solution lol. I was hoping someone would know.

Giddens Company adopted the dollar-value LIFO inventory method on December 31, Year 1. On

December 31, Year 1, Giddens’ inventory was in a single inventory pool and was valued at $400,000

under the dollar-value LIFO method. Inventory data for Year 2 are as follows:

12/31 Year 2 inventory at year-end prices $550,000

Price index at 12/31 Year 2 (base year Year 1) 110

Giddens’ inventory at dollar-value LIFO at December 31, Year 2 is:

a. $440,000

b. $510,000

c. $500,000

d. $550,000

Answer give by @Julie

The answer should be B, right?

-> Convert to Base Yr. Dollars: $550k/1.10 = $500k

-> Find Current Yr. Layer: $500k – $400k = $100k

-> Revert Current Yr. Layer to Current Yr. Dollars: $100k x 1.1 = $110k

-> Add to Previous Yrs.' Layers to find Ending Inventory at DV LIFO: $400k + $110k = $510k

[Anonymous]

I'm all screwed up on leases. Can someone help with what the answer AND what the JE for this would look like? Again, it is from Becker Final review book I borrowed from my coworker and I don't have the answers 🙁

On Dec 31, Y1, Eve leased a machine under a capital lease for ten years contracting to pay $50k on signing the lease and $50k annualy on Dec 31 of each of the next nine years. The PV @ Dec 31, Y1 of the ten lease payments discounted at 10% was $338,000. At Dec 31, Y2 Eve's total capital lease liability is:

$303,980

$266,800

$259.200

$243,000

[Juliemiddle]

@CPA2014 – lol…well, I'm about 99% sure the answer is right for DV LIFO – I haven't had any issues with those MCQs.

For the Lease question, the answer is B: $266,800

Yr. 1:

->$338k – $50k = $288k (The 1st payment is made on day 1 of the lease, so no Interest was accrued…the entire amount is deducted from the Lease Liability)

-> JE:

DR – Lease Liability $50k

CR – Cash $50k

Yr. 2:

-> $288k x 10% = $28.8k Interest Expense

-> $50k – $28.8 = $21.2k Lease Liability Pmt.

-> $288k – $21.2k = $266.8k Ending Balance of Lease Liability at 12/31/Y2

-> JE:

DR – Interest Expense $28.8k

DR – Lease Liability $21.2k

CR – Cash $50k

I just did a bunch of MCQs on leases this morning, and scored a 93%, so I'm confident in this answer, as well. Now…if you asked me about Govt. accounting…not so much :-/

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

CPAExcel, Ninja Audio (all sections)

[Anonymous]

Thanks @Julie!! So is there an initial entry to record the lease? Is is just:

DR Leased equipment 338

CR Lease obligation 338

Payment

DR Lease obligation 50

CR Cash 50

When are you scheduled for the exam?

[Juliemiddle]

Sorry…yes, that's definitely the initial entry – record/recognize the Leased Asset and Lease Liability.

I'm taking my exam on Monday, 10/20. I'm so ready to be done, but so not ready…lol.

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

CPAExcel, Ninja Audio (all sections)

[Anonymous]

@julie I bet you will do great!! What did you get hung up on the first time around?

[yacobkahsai]

@Julie- Thanks so much! I feel much better now. I thought I was the only one feeling that way, I guess not anymore. Also, I was planning to pushing my exam for another week, which should give me another week of reviewing my notes and practicing simulations.

[Author]

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