FAR Study Group Q1 2017

CPA Exam Forum FAR FAR Review FAR Study Group Q1 2017

This topic contains 2,502 replies, has 106 voices, and was last updated by  mckan514w 1 month, 2 weeks ago.

Viewing 30 posts - 301 through 330 (of 2,503 total)
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  • #1428357

    NYaccountingstudent
    Participant

    AmeriGene Inc. reported net periodic pension cost of $400,000 in the current year, calculated as follows:

    Service cost $ 300,000
    Interest cost 175,000
    Expected return on plan assets (100,000)
    Amortization of prior service cost 40,000
    Amortization of net gain (15,000)
    Net periodic pension cost $ 400,000

    AmeriGene has an overfunded pension plan. The company's effective tax rate is 30%. How will the service cost component of the current year net periodic pension cost affect the current year balance sheet?

    a. $300,000 increase in noncurrent pension benefit asset.
    b. $90,000 increase in deferred tax asset.
    c. $300,000 decrease in retained earnings.
    d. $90,000 increase in accumulated other comprehensive income.

    Why is the answer B $90,000 increase in deferred tax asset and not $120,000???? Wouldnt 30% of the $400,000 net periodic pension cost be $120,000?

    I just started F6 today so maybe im missing something that is very easy


    One shot to pass FAR or i lose credit for REG
    AUD - 75
    BEC - 78
    FAR - NINJA in Training
    REG - 75
    #1428542

    A1lessio
    Participant

    Time to bang out 4 hrs of studying after a solid 10 hour workday!


    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
    #1428569

    BondVillain
    Participant

    @NYaccounting. That's a tough one. I think maybe there are some permanent differences that decrease the allowable future deduction to 300K.


    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
    #1428635

    Operation_CPA
    Participant

    State University received two contributions during the year that must be used to provide scholarships. Contribution A for $10,000 was collected during the year, and $8,000 was spent on scholarships. Contribution B is a pledge for $30,000 to be received next fiscal year. What amount of contribution revenue should the university report in its statement of activities?

    The answer is $40,000.

    My question: Contribution A is a cash collection so that can be considered revenue because it is received. However, the $30,000 – isn't that a conditional pledge that cannot be recorded as revenue until it is earned? My only guess would be the fact that the question stem asks for contribution revenue. Whether the pledge has a condition is irrelevant possibly?


    FAR - Pass
    AUD - Q2 2017
    REG - TBD
    BEC - TBD
    #1428695

    runegoblet3xx
    Participant

    Actually, it doesn't look like its a conditional pledge according to the question. It doesn't say anything specifically that “this must be done” in order to receive the contribution.

    Therefore, unconditional pledges are recognized in current year as contribution revenue.

    I hope that helps!!


    "Success is not final, failure is not fatal: it is the courage to continue that counts."
    #1428834

    Cjsr
    Participant

    @NYaccounting – The question just asks about the service cost component, which is 300k, so tax effect is 90k. Isn't it kind of strange to phrase a question this way? Instead of just asking a question about temporary tax differences? So this becomes a question where you have to think about tax differences AND about where the various parts of pension-related accounts end up on the balance sheet, two completely separate topics in my head.


    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
    #1428855

    Spartans92
    Participant

    Finally made my ninja purchase for FAR! Not too many days left but let's go!!!


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

    3 down 1 more to go. BEC is on the Line 🙁

    #1428995

    Spartans92
    Participant

    Hey guys, are CD's considered as Cash or cash equivalent? I thought I remember in becker somewhere that CD doesn't fall under the category. Thanks


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

    3 down 1 more to go. BEC is on the Line 🙁

    #1429164
    Mscfisher
    Mscfisher
    Participant

    Anyone doing warly morning study sessions? I'm scheduled for feb 25 though i really want to puah it earlier to i can celebrate my sons bday stress free the weekend of the 20th. I was insanely sick for a week so not onlt couldnt i go to work but i was so drugged up i couldnt atudy either! Anyway back at it. I'm using flashcards to help me. Redoing wach chapter. Becker mcqs and ninja.


    Luck is when when preparation meets opportunity
    AUD - 77
    BEC - 83
    FAR - NINJA in Training
    REG - 83
    #1431777

    mckan514w
    Participant

    good morning @mscfisher I am almost always an early morning studier.. my brain seems to work best at this hour. Hope you are feeling better. I am living in fear of either getting sick or being snowed in at test date. I just pushed my back to the 24th but like you ideally I would love to be able to move it forward again. GOOD LUCK!

    @spartan CD's that mature within 3 months are considered cash / cash equivalents- so watch your dates! (and I believe it is from purchase to maturity- so if it is December 31 balance sheet and you have one bought 1/1/x1 maturing 1/1/x2 for 200 and one bought 11/1/x1 maturing 1/1/x2 for 300- only the one for 300 would be considered cash / cash equivalent because its maturity is within 3 months thus “highly liquid” )


    And they ask me why I drink

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

    #1434123
    GiniC
    GiniC
    Participant

    I study in the mornings but not as early as mscfisher and mckan514 – usually around 7 AM


    Prep using Becker live classes
    AUD - 95
    BEC - 82
    FAR - 86
    REG - 82
    #1434150

    BondVillain
    Participant

    Another caveat with cash and cash equivalents. For-profit and not-for-profit entities can classify equivalents with an original maturity date of three month or less. For example if the reporting date is 12/31/16 and the cash equivalent was for a 6 month CD maturity in January 2017 – it would not be considered a cash equivalent. It has to have original 3 maturity date or less.

    For governmental accounting, cash equivalents can have maturities longer than 3 months so long at they mature 3 months after the reporting balance sheet date.


    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
    #1434581

    Spartans92
    Participant

    Thanks guys. heres another question Im not really understanding because of the wording.
    Lano Corp.'s forestland was condemned for use as a national park. Compensation for the condemnation exceeded the forestland's carrying amount. Lano purchased similar, but larger, replacement forest land for an amount greater than the condemnation award. As a result of the condemnation and replacement, what is the net effect on the carrying amount of forestland reported in Lano's balance sheet?

    a.
    The amount is increased by the excess of the replacement forestland's cost over the condemned forestland's carrying amount.
    b.
    The amount is increased by the excess of the replacement forestland's cost over the condemnation award.
    c.
    The amount is increased by the excess of the condemnation award over the condemned forestland's carrying amount.
    d.
    No effect, because the condemned forestland's carrying amount is used as the replacement forestland's carrying amount.

    I thought B was the answer because we look at the gain or loss based on how much we got vs the carrying amount. So I thought the proceed is the award and the Carrying is how much we replacing for.. But that's incorrect. The answer is A. Appreciate the help.


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

    3 down 1 more to go. BEC is on the Line 🙁

    #1434599

    BondVillain
    Participant

    The best way to approach these questions is to assign values based on the facts, as follows:

    Replacement cost of new property 1,200,000
    Condemnation award 1,000,000
    Carrying amount of old property 800,000

    A gain would have been recognized on the condemnation and would not have affected the basis in the new property. It's an entirely separate transaction.


    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
    #1434602

    mckan514w
    Participant

    Oh I am so horrible at these condemnation questions- but I think it essentially should be recorded as two separate transactions so making up numbers
    thus the condemnation would be

    DR Cash 200
    CR Land 100- Carry amount
    CR Gain on Condemnation 100

    Then your new purchase would be
    DR Land @ Purchase Price 300
    CR Cash 350

    So essentially netted together your land account has increased by the amount you paid for the new land less the carry amount of the old land. Or 300 – 100.


    And they ask me why I drink

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

    #1434612

    mckan514w
    Participant

    Okay Gelim is seriously kicking my A$$!!! Sorry just needed to rant 🙂


    And they ask me why I drink

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

    #1434617

    Spartans92
    Participant

    ohh. I see. Thanks! I hate F2! 🙂


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

    3 down 1 more to go. BEC is on the Line 🙁

    #1434624
    mtaylo24
    mtaylo24
    Participant

    @McKan, you are making better progress that me. I just finished PPE yesterday LOL, and then was greeted by Inventory (I'm going backwards). I thought all of the hard stuff was supposed to be at the end of the book smh!


    A: 60, 61, 61, 78 (Expires May 31)
    R: 55, 69, 74, 75
    B: 71, 72, 73, 76
    F: 52, 54, 72 (May 23rd)
    AUD - 78
    BEC - 76
    FAR - NINJA in Training
    REG - 75
    #1434627

    Cjsr
    Participant

    On differences between GAAP and IFRS, Becker has a summary section with 71 items. Ninja book presents this differently, but I count roughly 25 items covered. These differences seem arbitrary to me. For most FAR concepts, I try to make up a story where a procedure makes sense. I know I can't just memorize 71 items that are different, I need brain space for nonmonetary transactions and sale leasebacks and such. Any hints on mastering IFRS?


    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
    #1434630

    mckan514w
    Participant

    LOL don't know about that Mtaylo- am stuck on receivables today and man I used to think I understood this stuff until I hit these questions- ha…


    And they ask me why I drink

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

    #1434633
    scared_cpa
    scared_cpa
    Participant

    I'm sorry if this has been asked already but does anyone have tips on acing research sims? I have never been good at them and usually only get them right in studying on the 2nd attempt. I can't remember if the “search within” option is available with highlighted terms like it is in ninja mcq and I NEED to get the research question right. All points count and I am weak in the sims.


    FAR - 67, 82 (Expires 07/31/18)
    AUD - 68, Retake Q2 2017
    REG - Q3
    BEC - Q3 or Q4

    Wiley CPAexcel + Ninja MCQ

    #1434644
    mtaylo24
    mtaylo24
    Participant

    @cjsr, W/ Gleim, we can select IFRS only questions and then we are given an 8 page appendix that breaks down the differences by the chapter. I think there are only 90 questions in the entire TB, but I planned to do a thorough session on those towards the end. Does Becker allow you to weed out the IFRS questions?

    @scared_cpa, all I have ever done was identify a keyword, search, then search within. I usually get them right in the Gleim TB.


    A: 60, 61, 61, 78 (Expires May 31)
    R: 55, 69, 74, 75
    B: 71, 72, 73, 76
    F: 52, 54, 72 (May 23rd)
    AUD - 78
    BEC - 76
    FAR - NINJA in Training
    REG - 75
    #1434651

    mckan514w
    Participant

    Also cpareviewforfree.com has an entire section of nothing but IFRS questions that I found very helpful last go round.


    And they ask me why I drink

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

    #1434671

    Cjsr
    Participant

    Thank you, mtaylo and mckan! My access to Becker expired in October, and I decided instead of paying for that whole section again I would go with the Ninja 10-point Combo instead. But I don't think Becker had an option to isolate the IFRS questions. I'm rereading the Becker book along with Ninja. I think it will be good to have the Ninja mcqs as a fresh test bank.

    I'm also making my own flash cards on 5 x 7 cards, not really flash cards because I put all the info on one side only because it annoys me to have to flip cards. So maybe just my way of taking notes of the things especially that need to be memorized.


    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
    #1434681
    scared_cpa
    scared_cpa
    Participant

    @mtaylo24, thanks, I will just do a lot of ninja sims and hopefully get better at them. They seem like such easy points to pass up! Has there been a revised or updated list of what sims are research?


    FAR - 67, 82 (Expires 07/31/18)
    AUD - 68, Retake Q2 2017
    REG - Q3
    BEC - Q3 or Q4

    Wiley CPAexcel + Ninja MCQ

    #1434710
    Mscfisher
    Mscfisher
    Participant

    @scared_cpa
    For the research SIMS i always use the advanced search tool and add the wording that's in the question so it narrows down my results. I've learned that when they all for examples its usually referencing the appendix. Keep practicing you will get it!


    Luck is when when preparation meets opportunity
    AUD - 77
    BEC - 83
    FAR - NINJA in Training
    REG - 83
    #1434716

    Spartans92
    Participant

    IFRS is much more simple than GAAP in my opinion lol. Becker section on IFRS vs GAAP is ALL IFRS questions. I guess all of us are hitting a road block. Sitting here reviewing Ch 2 Revenue recognition and completed contracts etc.. These topics are the worst!


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

    3 down 1 more to go. BEC is on the Line 🙁

    #1434762

    Test Your Might.

    To keep the answers all in one place, please post in the FB thread to enter.


    Free NINJA Notes. HIYA!

     

    #1434767

    BondVillain
    Participant

    @scared_cpa here's a list of all the Ninja simulations:

    https://www.another71.com/cpa-exam-forum/topic/ninja-mcq-simulations-complete-topic-list-by-sim/

    I also recommend getting access to codification via Fasb.org. You can sign up for a basic membership that's free.


    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
    #1434795
    scared_cpa
    scared_cpa
    Participant

    @mscfisher Thanks for the tip! I will try that out on my next research sim!

    I also have a question about including interest receivable in notes. I am working sim #4 in Ninja MCQ and notice that interest is included in a LT receivable on a noninterest bearing note but is not included in another note. Why is interest part of some receivables and not others? Here are the examples. You're to find LT receivable on 2013 BS:

    The $750,000 note receivable is dated May 1, 20X2, bears interest at 9%, and represents the balance of the consideration Kern received from the sale of its idle building to Able Co. Principal payments of $250,000 plus interest are due annually beginning May 1, 20X3. Able made its first principal and interest payment on May 1, 20X3. Collection of the remaining note installments is reasonably assured.
    ~~The answer is 250,000. I understand this because it is 750,000 less the 2013 payment and current receivable for 2014.

    The $200,000 note receivable is dated December 31, 20X0, bears interest at 8%, and is due on December 31, 20X5. The note is due from Frank Black, president of Kern, Inc., and is collateralized by 5,000 shares of Kern's common stock. Interest is payable annually on December 31, 20X3. The quoted market price of Kern's common stock was $45 per share on December 31, 20X3.
    ~~The answer is 200,000 because payment is not due until 2015 even though interest payments are due.

    On April 1, 20X3, Kern sold a patent to Frey Corp. in exchange for a $100,000 noninterest-bearing note due on April 1, 20X5. There was no established exchange price for the patent, and the note had no ready market. The prevailing interest rate for this type of note was 10% on April 1, 20X3. The present value of $1 for two periods at 10% is 0.8264. The patent had a carrying amount of $40,000 on January 1, 20X3, and the amortization for the year ending December 31, 20X3, would have been $8,000. Kern is reasonably assured of collecting the note receivable from Frey.
    ~~The answer is 100,000 x .8264 = 82,640 + (82,640 x 10% x (9/12)) = 88,838. I understand discounting the note and I can understand why the interest is added back to it to reach face value by the time it is due. But I don't understand why the interest is added to the LT receivable in this case but not the two examples listed above?

    I'm obviously confused about this so I'm hoping someone can help me understand. I apologize for asking so many questions on here!!!


    FAR - 67, 82 (Expires 07/31/18)
    AUD - 68, Retake Q2 2017
    REG - Q3
    BEC - Q3 or Q4

    Wiley CPAexcel + Ninja MCQ

Viewing 30 posts - 301 through 330 (of 2,503 total)

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