December 31, 2018 at 4:29 am #2135767AnonymousParticipant
Can someone take a look at this question and tell me what the explanation is really saying? I answered correctly and understand the concept of conservatism, but was completely unaware that it is no longer a thing.
What is the underlying concept governing the generally accepted accounting principles pertaining to recording gain contingencies?
Conservatism is gone now and in the future, but it was still the basis for this rule when the rule was decided upon, and the rule is still in effect. Future rules will not be based on conservatism, but the past rules were, and many are still in effect (e.g., lower of cost or market). A change in a concepts statement (Statement of Financial Accounting Concepts) does not change the rule, and does not change the basis for it.January 1, 2019 at 7:49 pm #2140402
@Tbizzle Thank you for your advice! I am actually doing what you suggested. I can feel I start getting those journal entries. The more I practice the more I get them. Thank you!January 2, 2019 at 11:53 pm #2144311stanParticipant
what is the correct answer if it is not conservatism ?January 3, 2019 at 12:02 am #2144326stanParticipant
Can we use plain paper for scratch paper at the prometric center rather than laminated papers? I am allergic to markersJanuary 3, 2019 at 7:46 pm #2146627CPAParticipant
They can give you papers and a calculator, It depends on the location. it best to call or stop by your Prometric location and ask them.January 7, 2019 at 2:11 pm #2153110CPAat33Participant
Currently 10 years post college and am – for the first time – sincerely studying and anticipating passing the CPA exam this year.
I have been through the cycle of studying and then get too anxious and restart for the past 10 years.
I am using wiley study materials and am planning to take FAR as the first exam, hopefully around April of this year.
Looking forward to successfully passing!!January 8, 2019 at 2:30 pm #2155063PuppykoalaParticipant
Hi, never thought I would take CPA exam since accounting was one of my most hated subjects when I was at school two years ago. Then real world classroom taught me how important it is to understand business and numbers and CPA as a tool to advance career. I'm planning to take FAR around April so I can have about 3 months part time studying it. I heard FAR is the hardest and contains the most information and should be taken first. All my accounting education was from a certificate program from UCSD Extension, and mostly online self-studying, so I'm definitely a bit nervous. I'm using Becker review and just started last weekend. Glad to see so many are going through the same journey alongside.
Good luck to you all!January 9, 2019 at 5:26 pm #2156917
Glen County uses governmental fund accounting and is the administrator of a multiple-jurisdiction deferred compensation plan covering both its own
employees and those of other governments participating in the plan. This plan is an eligible deferred compensation plan under the U.S. Internal Revenue Code
and Income Tax Regulations. Glen has legal access to the plan's $40,000,000 in assets, comprising $2,000,000 pertaining to Glen and $38,000,000 pertaining
to the other participating governments. In Glen's balance sheet, what amount should be reported in the custodial fund for plan assets and as a corresponding
You answered B. The correct answer is D.
When a governmental unit is the administrator of a multiple-jurisdiction deferred compensation plan, it should report all of the plan assets and liabilities (e.g.,
$40,000,000) in Custodial Fund because the governmental unit is acting as an agent for both its own employees and other governments participating in the
-I thought for custodial accounts the liability portion was only for the government unit of the financial statements and the the net position was for the portion that belonged to another entity. The assets would be $40, liabilities would be $38 and net position would be $2. Can someone please explain this. Thank you.January 10, 2019 at 9:18 am #2157898
Casey entered into a troubled debt restructuring agreement with First State Bank. First State agreed to accept land with a carrying amount of $85,000 and a
fair value of $120,000 in exchange for a note with a carrying amount of $185,000. Casey has restructured debt twice in the last five years. Disregarding
income taxes, what amount should Casey report as an ordinary gain in its income statement?
B. $ 35,000
C. $ 0
You answered D. The correct answer is A.
Casey would report an ordinary gain of $65,000: the difference between the obligation settled ($185,000) and the fair value of the asset
-Why is he gain not $100,000, you need to recognize the gain from carrying value to fair value and then from fair value to debt relieved. It also mentions ordinary gain and I thought there is no longer ordinary/extraordinary gains. Thanks for the help.January 16, 2019 at 5:03 pm #2167717MOParticipant
I got a TBS question about FASB AL code asking for disclosures required when a company contracts to do R&D for another. FAR AL seems to be more vague than AUD. Anyone know?January 17, 2019 at 12:43 pm #2168872
I might not be 100% right, but just try to give you some thoughts.
Your first question: the $2,000,000 belongs to Glen County's employees. so its a liability.
Your second question: I think this question is focus on ordinary/capital gain. The $35,000 might be the capital gain.January 17, 2019 at 1:29 pm #2168947
@Timmyj correct myself
Your second question: the $35,000 might be recorded under OCI, not ordinary gain.January 18, 2019 at 10:47 am #2170297rahil82Participant
Any easy way to learn deferred taxes? It's really time consuming.
Thank youJanuary 18, 2019 at 10:47 am #2170300rahil82Participant
Any easy way to learn deferred taxes? It's really time consuming.
Thank youJanuary 19, 2019 at 2:26 pm #2171893SeanWParticipant
Two questions I'm struggling with (conceptually).
1. When a Foreign Sub is required to use the Remeasurement Method, what is the journal entry to record the Currency Gain/Loss to balance R/E? Obviously one side is the Currency Gain/Loss Account used to affect Net Income; but I can't picture what the other side is.
2. The Deferred Tax Valuation Allowance Account – How is this account presented on the Balance Sheet and second, what happens to it over time? I realize it can be reversed if enough future income is generated; but what happens over time if no income is generated? Is it written off somehow and if so, what does that journal entry look like?
Thank you.January 19, 2019 at 6:45 pm #2172292CPAGIRLParticipant
I am studying for FAR using WileyExcel. Do you think it is worth doing the task based sims while studying, I heard it more beneficial to focus on MCQ for practice? How was your experience?January 20, 2019 at 5:11 pm #2173633SeanWParticipant
I figured out #2. The Allowance is netted against the Deferred Tax Asset similar to how the Allowance for AR is netted against AR. Then to close the allowance once enough time has passed, you can just remove the Asset and related Allowance.
Still looking for assistance with #1 though.January 21, 2019 at 3:01 pm #2174935StevieParticipant
Struggling with Cash to Accrual/Accrual to Cash. What were some ways that helped you understand this?
ThanksJanuary 22, 2019 at 4:09 pm #2176675HuillyParticipant
@Born to Win,
I believe the correct formula should be C = 10% x (75,000 – C) and then you solve the equation for C.
The rationale being the contribution amount must equals 10 percent of the income after the deduction. And the income after the deduction implies it is equal to 75,000 minus C.January 23, 2019 at 2:52 pm #2178121CPA2beParticipant
I am not 100% sure, but try ASC 808-50. It talks about disclosures related to collaborative arrangements.January 24, 2019 at 4:54 am #2178880KevinParticipant
Can anyone help this question? I have no idea about why this leasehold improvements is ‘29,000'
During December 2014, costs of $89,000 were incurred to improve leased office space with economic life of 20 years.
The related lease will terminate on December 31, 2030, and is not expected to be renewed.
The office space was renovated on December, 2010 at a cost of $60,000 and was depreciated using double declining balance method.
Prepare proper journal entries for each of the transactions.
The Answer : Debit Credit
Leasehold Improvements 29,000
Accumulated Depreciation 20,634
Loss 39,366 Accounts payable 89,000
I don't know why there is a loss and Accumulated Depreciation. Please help me!!!January 24, 2019 at 9:30 am #2179096ElizabethParticipant
Hi all. I am studying for FAR, and am taking it March 7th for the first time. I am using Becker to study!
I was wondering if anyone could possibly give me a ‘lesson for dummies' on two topics!
1. Leases (Becker Ch. 6 Module 2 (and 1, but I found 2 harder)). They have changed and I do not follow the Becker lecture as compared to the MCQs
2. Not for Profit revenue recognition (Becker Ch. 8 Module 5). What is the best way to think of these?January 24, 2019 at 9:39 am #2179114ElizabethParticipant
Hi!@syu1087. I try and make T charts for things I am unsure of. I also try to picture what the journal entries would be in my head. For example, if we have sold goods, but not been paid….
Dr: accounts receivable
Cr: sales revenue
Here, there is no cash, but you have to accrue for the revenue. Therefore, that year, revenue would be higher under the accrual method because Net Income is ultimately higher (more revenue is recorded)January 28, 2019 at 8:07 pm #2185891jslevin914Participant
Anyone have any tips on non monetary transactions. Felt they were a lot easier for reg. Any tips would be appreciatedJanuary 28, 2019 at 11:01 pm #2186245ZLH123Participant
Does anyone knows if partnership will be included in Far 2019 exam?
Thanks everyone!January 29, 2019 at 3:56 pm #2187430TerriSilvaParticipant
guys I'm taking FAR on Thursday for the millionth time (seems like) and I've passed the other 3…question is are the new lease standards now implemented on the exam?January 30, 2019 at 12:33 am #2188372January 30, 2019 at 12:34 am #2188375January 30, 2019 at 8:16 am #2188531
Good Morning Everybody!
Before I get some serious comments about disclosing the exam in my previous post I just want to tell you all I was joking. Seriously. There’s a huge testbank the questions get pulled from and it’s vitually impossible to get the same questions twice. @mo, that’s way too much info disclosed. That’s not cool. I will say however that the 15-20% governmental on the exam is misleading because my exam was was composed of about 30% governmental. That’s not cool either. Very misleading…was not expecting the amount of governmental questions I got on my exam… definitely a retake for me…January 30, 2019 at 10:29 am #2188687
Question # 587 | Blueprint Area: 2 D : Property, Plant and Equipment
On January 1 ten years ago, Andrew Co. created a subsidiary for the purpose of buying an oil tanker depot at a cost of $1,500,000. Andrew expected to operate the depot for 10 years, at which time it is legally required to dismantle the depot and remove underground storage tanks. It was estimated that it would cost $150,000 to dismantle the depot and remove the tanks at the end of the depot's useful life. However, the actual cost to demolish and dismantle the depot and remove the tanks in the tenth year is $155,000. What amount of expense should Andrew recognize in its financial statements in year 10?
A. None, recognized in prior years
B. $5,000 expense
C. $150,000 expense
D. $155,000 expense
You answered D. The correct answer is B.
Obligations for dismantlement, restoration, and abandonment costs are accounted for as asset retirement obligations. Upon initial recognition of a liability for an asset retirement obligation, an entity capitalizes an asset retirement cost by increasing the carrying amount of the related long-lived asset by the same amount as the liability. An entity subsequently allocates that asset retirement cost to expense using a systematic and rational method over its useful life. Application of a systematic and rational allocation does not preclude an entity from capitalizing an amount of asset retirement cost and allocating an equal amount to expense in the same accounting period. The company increased the carrying amount of the depot the $150,000 cost to dismantle and amortized it over the 10 years. In this case, only the extra $5,000 ($155,000 actual cost – $150,000 estimate) would be expensed in year 10.
Editor's Note: The AICPA provided item (b) as the unofficial solution. The editors believe the company could have, and perhaps should have, chosen to expense the $150,000 evenly over 10 years in what is termed an accretion expense. If it had done so, the expense in year 10 would have been $20,000 (the $15,000 original allocation plus the additional $5,000 in actual cost). Given thaqt $20,000 was not an answer option, one must assume that the company did not do so. Candidates need to prepare to answer questions with the best solution choice possible.
-The above is a question from Ninja MCQ's, Why is the depreciation of $150,000 + the $15,000 accretion expense amortized + the $5,000 cost over what was estimated no all included. In the AICPA note and the Editor note (Ninja editor) both ignore depreciation expense (and this is classified as a PPE problem not a AR)/liability problem) so I would think depreciation would at least be considered. How are problems released that have such discrepancies?
FAR Study Group 2020 - Page 2
- This topic has 342 replies, 140 voices, and was last updated 4 days, 14 hours ago by .
Viewing 30 posts - 31 through 60 (of 343 total)
Viewing 30 posts - 31 through 60 (of 343 total)