FAR Study Group Q1 2017

CPA Exam Forum FAR FAR Review FAR Study Group Q1 2017

This topic contains 2,502 replies, has 0 voices, and was last updated by  mckan514w 5 months, 1 week ago.

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  • #1396517

    Welcome to the Q1 2017 CPA Exam Study Group for FAR. πŸ™‚

    #1396734

    Spartans92
    Participant

    Wow Aren't I early for this Q.. haha. anyways does anyone have any good study tips with bonds? I watched the Demo video on ninja plus and Bob broke the topic down into an understandable way but then when I do becker's questions I dont even know where to begin… I dont got much time left and with 5 chaps to go Im frustrated… luckily govt and nfp won't take that long with the extended weekend/ holiday.

    I appreciate the help if anyone can give me some tips to make this topic “click.”

    Here's an example: On January 2, Year 1, West Co. issued 9% bonds in the amount of $500,000, which mature on January 2, Year 11. The bonds were issued for $469,500 to yield 10%. Interest is payable annually on December 31. West uses the effective interest method of amortizing bond discount. In its June 30, Year 1 balance sheet, what amount should West report as bonds payable?

    a.
    $500,000
    b.
    $471,025
    c.
    $470,475
    d.
    $469,500

    based on process of elimination I know A and D cannot be the answer. But I just dont know how to approach. Thanks guys!


    BEC - 76 (Expiring OCT)
    REG- 67, 85
    AUD-63, 74, 80!!
    FAR-65, 62 retake August 31 2017 (LAST ONE)

    3 down 1 more to go. BEC is on the Line πŸ™

    #1396761

    A1lessio
    Participant

    Spartans92- I also struggled with bonds and pretty much every other chapter. For bonds I kept re-watching the Becker lectures on my commute and writing out the section seems to really be helping me out. I went from scoring 30-40% on mcqs to 70-75%. For bonds make sure you fully understand discounts/ premium and start from there.

    The first thing I noticed is that it was issued at a discount and we are using the effective interest method. Since your interest rate (9%) is lower than the market(10%) you have to sell it for cheaper because an investor buying the bonds will want the higher market rate. Notice west co is only receiving $469,500.

    with a discount we add back the unamortized discounts to arrive at the face of the bond.

    Calculate the interest:
    Step 1: 469,500(bond issue price) x 10%(market rate) = 46,950
    Step 2: 500,000 x 9%(stated rate) = 45,000

    46,950-45,000 = 1,950. Take half since it's the June 30th B/S date. We are left with $975. Since it's a discount we add the $975 back to the 469,500 to arrive at the face.
    (c) 470,475


    People who subject themselves to the strictest discipline, who give up certain pleasurable things in order to obtain a goal are the happiest of men.
    AUD - 86
    BEC - 70
    FAR - 78
    REG - 84
    #1396793
    Amor
    Amor
    Participant

    Mi amor joining the wagon!
    I'm a repeater. I hate to join this thread (but I got no choice!) because I already passed FAR in 2014, bummer!
    I must admit, when I began my repeat study in AUD in September, I kept looking back and feeling so bitter to ever repeat a section that I already passed. I scored a 75 in 2013 and I was scared that I would not have much luck this time and might fail miserably. But when I passed AUD again with a comfortable margin, I told myself, it wasn't that too bad to repeat an expired pass.

    Anyway guys, let's all do it together in this forum. We will conquer this beast!

    @Spartan, check this bond thread I created almost 3 years ago. Hope this helps. I am also going to get some refresher of this info because I totally forgot FAR after struggling so bad with REG and BEC alternately.

    https://www.another71.com/cpa-exam-forum/topic/far-bonds-bonds-bonds-and-bonds/


    "But as for you, be strong and do not give up, for your work will be rewarded."
    (2 Chronicles 15:7)
    #1396829

    mckan514w
    Participant

    Ah its like homecoming in here πŸ™ good to see you Spartan, A1 and AmorD…. good luck to all of us!


    And they ask me why I drink

    BEC 71, 82
    AUD 75
    REG 75
    FAR 61, 69, 83

    #1396835
    mtaylo24
    mtaylo24
    Participant

    I feel like I'm in a Q1 Summer school 😎


    A: 60, 61, 61, 78 (Expires 11/30)
    R: 55, 69, 74, 75
    B: 71, 72, 73, 76
    F: 52, 54, 72, 71
    AUD - 78
    BEC - 76
    FAR - NINJA in Training
    REG - 75
    #1396886

    A1lessio
    Participant

    mtaylo24 – how will you tackle FAR and BEC? Do you think we can get it done in Q1?


    People who subject themselves to the strictest discipline, who give up certain pleasurable things in order to obtain a goal are the happiest of men.
    AUD - 86
    BEC - 70
    FAR - 78
    REG - 84
    #1396899
    sallybreann
    sallybreann
    Participant

    I take FAR January 9th. Started Studying November 10th and made it through the Becker material this weekend. I have never taken FAR before so I’m not sure if my study plan will work. But I plan to do 20 Non-Profit/Governmental MCQ’s each day because I had such a hard time learning it and don’t want to forget. Then will build on that and start reviewing other material (Starting right away with leases/bonds) and will re-review material for half of my study time each day and start review on a new topic the next. If anyone else is using Becker/NINJA MCQ’s and wants to swap study tips I’d love to hear what others are doing.


    FAR - 82

    BEC - 74 / retake 9/8/17

    AUD - 78

    REG - 7/31/17

    #1396943
    mtaylo24
    mtaylo24
    Participant

    @a1lessio, I really hope I can get them both done this window. I'm just glad that I'm only focusing on 2 this window, as I did 3 in both Q3 and Q4. I am still brainstorming on the timing, but as far as the strategy, I will primarily work with Gleim, then maybe switch to Ninja as time permits.

    Weeks 1 – 3(or 4 or 5): Using Gleim, Read a study unit in its entirety, watch audiovisual lecture in its entirety , work all of the chapter MCQs start to finish. Re-work all questions for that chapter until I score at least 80%, then move on to the next chapter. Gleim has 20 subunits (but I'm attacking them based on where I think I need improvement, so I did Ch 18 (Gov't), Ch 15 (Business Combos), Ch 10 (Pensions/Benefits), and today I am working on Ch 9 (Intangibles/Franchise/Software/Prepayments). Sundays will be a refresher, a cumulative study day. This past Saturday, I dropped all of the JEs from the audiovisual lectures into a spreadsheet and converted to pdf. I plan to review these JEs often throughout the week.

    Final 3 weeks (final review): Ninja MCQ, Gleim sims, re-reading of the text.

    I am still working on the timing and squeezing BEC in, but I think I want to do FAR first since I'm really not connecting with this one.


    A: 60, 61, 61, 78 (Expires 11/30)
    R: 55, 69, 74, 75
    B: 71, 72, 73, 76
    F: 52, 54, 72, 71
    AUD - 78
    BEC - 76
    FAR - NINJA in Training
    REG - 75
    #1396956

    BondVillain
    Participant

    Another way to approach this bond problem is to do the necessary journal entry. For me I always start from interest payable or in this case ‘accrued interest payable:

    Accrued interest payable 6/12 x .09 x 500,000 = 22,500 (this represents the actual cash that will be paid)

    Interest expense 6/12 x 469,500 (carrying amount) x .1 = 23,475

    Discount amortization (to the balance sheet) is the difference between these two numbers – 975

    Last step is to credit the bond carrying amount 469,500 by the 975 equaling 470,475

    Also, need to remember:

    Yield > Stated rate = Discount

    Yield < Stated rate = Premium


    Q3 2015: AUD 87
    Q2 2016: REG 85
    Q3 2016: BEC 73, Retake 80
    Q1 2017: FAR
    AUD - 87
    BEC - 80
    FAR - NINJA in Training
    REG - 85
    #1396971

    BondVillain
    Participant

    On topic: just did simulation 17 (Bonds) and scored horribly. The problem involved an investor buying a bond rather than a debtor issuing one.

    Lesson learned (according to Ninja): if you are investing in bonds then there is not a separate bond premium or discount account, it is included in the bond investment account.


    Q3 2015: AUD 87
    Q2 2016: REG 85
    Q3 2016: BEC 73, Retake 80
    Q1 2017: FAR
    AUD - 87
    BEC - 80
    FAR - NINJA in Training
    REG - 85
    #1397316

    Spartans92
    Participant

    So it has been a while since I last took FAR. Are the computations that long like Becker. I just did 1 question related to pension calculating the periodic pension cost and it took me 10 mins. Heres the question.. I got it right but its very time consuming.
    Big Books, Inc. has the following information related to its defined benefit pension plan:

    December 31, Year 6:

    Projected benefit obligation

    $1,500,000

    Fair value of plan assets

    1,400,000

    Unrecognized prior service cost

    200,000

    Unrecognized net transition asset

    60,000

    December 31, Year 7:

    Projected benefit obligation

    $1,740,000

    Fair value of plan assets

    1,670,000

    Service cost

    220,000

    Assumptions:

    Discount rate

    6%

    Expected return on plan assets

    8%

    Big Books makes an annual pension plan contribution of $200,000. The company's employees had an average remaining service life of 20 years on 12/31/Year 6. The company paid benefits of $70,000 in Year 7 and expects to pay benefits totaling $170,000 to retired employees in Year 8. Big Books has an effective tax rate of 30%. The actual return on plan assets was 10%. What would Big Books report as U.S. GAAP net periodic pension cost on its December 31, Year 7, income statement?


    BEC - 76 (Expiring OCT)
    REG- 67, 85
    AUD-63, 74, 80!!
    FAR-65, 62 retake August 31 2017 (LAST ONE)

    3 down 1 more to go. BEC is on the Line πŸ™

    #1397339

    stilgoin
    Participant

    Heyyyy. I swear – restudying seems so much harder than the first time. I am having trouble focusing on the work. I have time- I am lacking the will to get it done. Do I need a new test bank? The highest I have gotten on NINJA trending before an exam is 74. Should I stick with it or switch? Thoughts?


    Stilgoin, CPA

    β€œNo one ever fails the CPA exam. There are only those who give up.

    #1397354

    mckan514w
    Participant

    when are you sitting Stilgoin? I ended up getting a new test bank- if for no other reason then I at least feel like I am not spinning my wheels with the same old stuff- call it a mental adjustment if you will. My advice would be if you think you have time to get the benefit of a new testbank do it- but if you are sitting early January then I would stick with the same old same old so you don't “muddle the brain” if you will πŸ™‚ GOOD LUCK!


    And they ask me why I drink

    BEC 71, 82
    AUD 75
    REG 75
    FAR 61, 69, 83

    #1397366
    mtaylo24
    mtaylo24
    Participant

    @stilgoin I vote to get a new TB. FOR FAR and BEC Ninja is a good final review tool, but isn't the best to learn on imho. I do however feel that the Ninja questions are completely necessary. Wiley is 150 and Gleim is 250, I think that you may be able to demo them before you buy. I'm personally going to save Ninja for my final review after I am feeling decent w/ Gleim.


    A: 60, 61, 61, 78 (Expires 11/30)
    R: 55, 69, 74, 75
    B: 71, 72, 73, 76
    F: 52, 54, 72, 71
    AUD - 78
    BEC - 76
    FAR - NINJA in Training
    REG - 75
    #1397367

    stilgoin
    Participant

    Jan 18- could push to Jan 30. I lose REG 31st πŸ™ I think I am sticking with NINJA- I have never done MCQs to the extent of memorizing them; I always used other methods along with MCQs. I’m up from 59 to 74. I am still insecure, but I just need this one last push! Thanks- good luck to you too.


    Stilgoin, CPA

    β€œNo one ever fails the CPA exam. There are only those who give up.

    #1397375

    stilgoin
    Participant

    @mtaylo24 Thanks for the input. I will look into them. πŸ˜‰


    Stilgoin, CPA

    β€œNo one ever fails the CPA exam. There are only those who give up.

    #1397492

    Spartans92
    Participant

    I totally agree @stilgoin, this time it so much harder to study! The stuff I learned quick last round is taking me forever, for instance, bond. But things that I totally didnt understand like DTA/DTL is so much easier this time. Guess Reg paid off πŸ™‚

    Best of luck to you all.. Mckan and mtaylo!


    BEC - 76 (Expiring OCT)
    REG- 67, 85
    AUD-63, 74, 80!!
    FAR-65, 62 retake August 31 2017 (LAST ONE)

    3 down 1 more to go. BEC is on the Line πŸ™

    #1397802

    mckan514w
    Participant

    Thanks Spartans! Hang in there yourself- and your not alone last re-sit I found it “odd” that I completely struggled with topics that I found easy the first go round and had zero problems with a lot of the ones that I had a hard time with first time.


    And they ask me why I drink

    BEC 71, 82
    AUD 75
    REG 75
    FAR 61, 69, 83

    #1397889

    cwlanders
    Participant

    I will be taking FAR February 6th. It will be the second time I have taken it. I scored a 74 a month ago. I will also be taking REG on March 10th to hopefully finish these exams before the new test comes along. Good luck studying everyone!


    BEC- 91
    AUD- 74, 74, 79
    FAR- 74, 83
    REG- 84
    Ethics- 97
    #1397982
    mtaylo24
    mtaylo24
    Participant

    Question 29. On January 1, Year 1, Boston Group issued $100,000 par value, 5% 5-year bonds when the market rate of interest was 8%. Interest is payable annually on December 31. The following present value information is available:

    5%

    Present value of $1 (n = 5) 0.78353
    Present value of an ordinary annuity (n = 5) 4.32948

    8%

    Present value of $1 (n = 5) 0.68058
    Present value of an ordinary annuity (n = 5) 3.99271

    What amount is the value of net bonds payable at the end of Year 1?

    A. $88,022
    B. $90,064
    C. $100,000
    D. $110,638


    A: 60, 61, 61, 78 (Expires 11/30)
    R: 55, 69, 74, 75
    B: 71, 72, 73, 76
    F: 52, 54, 72, 71
    AUD - 78
    BEC - 76
    FAR - NINJA in Training
    REG - 75
    #1398300

    stilgoin
    Participant

    The answer is B. In the spirit of full disclosure, I have done this before. Is this Gleim?

    100,000 x .68058 = 68,058
    100,000 x .05 = 5,000
    5,000 x 3.99271 = 19,964

    68,058 + 19,964 = 88,022

    For end of year, add back amortization.

    88,022 x .08 = 7,042
    7042-5000= 2,042

    88,022 + 2,042 = 90,064

    1/1
    Dr Cash 88,022
    Dr Discount on B/P 11,978
    Cr Bonds Payable 100,000

    12/31
    Dr Interest Expense 7,042
    Cr Amortization of Discount 2,042
    Cr Interest Payable/Cash 5,000


    Stilgoin, CPA

    β€œNo one ever fails the CPA exam. There are only those who give up.

    #1398327
    mtaylo24
    mtaylo24
    Participant

    ^^^Correct! And it is Gleim 😎 I like your answer explanation better btw!


    A: 60, 61, 61, 78 (Expires 11/30)
    R: 55, 69, 74, 75
    B: 71, 72, 73, 76
    F: 52, 54, 72, 71
    AUD - 78
    BEC - 76
    FAR - NINJA in Training
    REG - 75
    #1398342

    stilgoin
    Participant

    I’m trying to do those JEs. πŸ™„ lol


    Stilgoin, CPA

    β€œNo one ever fails the CPA exam. There are only those who give up.

    #1398534
    GiniC
    GiniC
    Participant

    Hi everyone! FAR is my last section, and the sheer amount of material is daunting! I've done well with Becker so far so I'm sticking with it. I do add to it by digging through my textbooks and looking things up online when the review materials gloss over details. I'm giving myself plenty of time to get through the material – I have to wait for a new NTS after my current one expires 12/30, but I'm thinking of testing in early March.

    Here's hoping for good scores this round!

    Gini


    Prep using Becker live classes
    AUD - 95
    BEC - 82
    FAR - 86
    REG - 82
    #1398645

    Cjsr
    Participant

    I get stilgoin's explanation. But the wording of the question would have thrown me off during an actual exam. In the JEs, I see the credit of $100,000 to account “Bonds payable,” but I see no debit later on that would create a “net” “Bonds payable”. So – this means I shouldn't think of this as a question about ledger accounts. OK, but I would spin my wheels on this or just immediately pick C. But in the real world, suppose my boss said, hey, if we paid that off now, how much should it be, I'd get it. Just frustrated trying to figure out what the question is. This could be the difference between another 74 and a 75.


    BEC Jan 2016 83 Becker FastPass
    REG Jan 2016 83
    AUD May 2016 92
    FAR Jul 2016 74
    FAR Mar 2017. 91 Becker book + NINJA 10-point combo
    #1398974
    mtaylo24
    mtaylo24
    Participant

    Need some opinions on how I'm progressing. I Read a chapter of the text first and then hit the mcq for that chapter, which takes me plenty of sessions. I try to do the chapter in order first, then I hit 20 question sessions until I hit 80%. It took me until 1 am to do this yesterday for the bonds chapters yikes! Does this sound like a solid starting gameplan? Also, at what point do I stop and go back for older chapters? In at 1467 questions w/ 50% average. So far I've done since last Thursday's score release:

    Friday – Govt Accounting
    Sat – Skip to write out JEs for entire text
    Sunday – Business Combos
    Monday – Pensions
    Tuesday – Intangibles/Software/Franchises/R&D
    Wednesday – Bonds/PV/Notes Payable
    Today – NFP


    A: 60, 61, 61, 78 (Expires 11/30)
    R: 55, 69, 74, 75
    B: 71, 72, 73, 76
    F: 52, 54, 72, 71
    AUD - 78
    BEC - 76
    FAR - NINJA in Training
    REG - 75
    #1398984
    GiniC
    GiniC
    Participant

    Darn – they caught me two different ways on this one. First I missed “net” – so my first response was C – you always record the Bond Payable at face value. Then I latched on to “par” – if bonds are issued at par, there is no premium or discount – so nothing to amortize. Took me a while to recognize that they didn't mean “issued at par” by writing “$100,000 par value”. My textbook didn't use this phrasing…

    Grrrr… I know the concepts, they always catch me with wording!!!


    Prep using Becker live classes
    AUD - 95
    BEC - 82
    FAR - 86
    REG - 82
    #1398989
    GiniC
    GiniC
    Participant

    @mtaylo24- Sounds like a really ambitious schedule – I couldn't cover that much so fast, it would all blur!

    My learning style forces me to write things down to learn them thoroughly, so I follow parts of Jeff's plan – write out notes (I use cards I can carry around to quiz myself at work and while running errands). I also have to stop videos and dig into topics that were summarized. It takes longer to review, but I can usually get at least 70% of the MCQs correct on the first try.


    Prep using Becker live classes
    AUD - 95
    BEC - 82
    FAR - 86
    REG - 82
    #1398999

    Cjsr
    Participant

    “net bonds payable” equals “carrying amount”? Is this what we're saying?


    BEC Jan 2016 83 Becker FastPass
    REG Jan 2016 83
    AUD May 2016 92
    FAR Jul 2016 74
    FAR Mar 2017. 91 Becker book + NINJA 10-point combo
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