FAR Study Group Q1 2017
February 15, 2017 at 11:07 pm #1479012
Freight-out is ONLY considered to be shipping to the customer. The more questions I do, the less my brain works. And only 6 more days until the test. Pray for me… LOL.February 15, 2017 at 11:10 pm #1479015
@ybd215 yes true, you should take a rest, studying under such pressure is useless and wasting time only… take a day off of studying and go out 😉 good luck.February 16, 2017 at 4:29 am #1479114
I catch up on these posts every morning @4am. You guys are great! I have come to accept the fact that done questions i wok just miss. @matylo if you don't pass this go around there is absolutely no hope for me!February 16, 2017 at 6:40 am #1479124
@mscfisher, Thanks, hoping we all get through this quarter! Work is necessary, but some days it really screws up my momentum. Anyways, I was up until 12 last night, winded up with 120 for BEC and 120 for Far in Ninja. I'm also reading Gleim summaries in between each set…I did a set of 20 for both in Gleim since I was on the go and its more mobile friendly than Ninja. I'm going to feel much better once I get my trending/average up and get BEC out of the way next Friday.February 16, 2017 at 6:50 am #1479127
@mtaylo24 nice job!!! Are u settinh a time limit when u work the questions. I'm glad you could decipher what I'm saying I'm just reading my texts again and realizing wasn't quite clear. It should read I've come to accept that some questions I will miss. For me repetition is key. The more I read my notes the more it is starting to sink in.February 16, 2017 at 7:09 am #1479130
No worries! I may be over relying on the adaptive learning feature, because I know I will see the question in another session if I get it wrong, so I try not to dwell on the ones I truly do not know. Thats why Im starting out with that approach this time, so I can identify my weak areas. I used to do custom first, then switch the adaptive, but now I'm not sure if that startegy made much sense.February 16, 2017 at 9:44 am #1479178
can some explain this? If actual costs at the end of year 3 equaled $2.1M then why would you recognize the $150k and not reduce it to 50K..The answer says you would recognize the entire 500k throughout the 3 years,,meanwhile your GP was reduced to 400k…dont get this one especially when receipts only total the original contract price…unless they assumed that they would bill for another 100k? i know if you looked at it str8 without adding up total actual costs at the end of the contract you would get the 150k in year 3 but if you look you only make 400k and recognized 500k…so what happens to the other 100k? i got it correct however if there was an answer choice of 50k i would have gotten it incorrect.
Frame construction company's contract requires the construction of a bridge in three years. The expected total cost of the bridge is $2,000,000, and Frame will receive $2,500,000 for the project. The actual costs incurred to complete the project were $500,000, $900,000, and $600,000, respectively, during each of the three years. Progress payments received by Frame were $600,000, $1,200,000, and $700,000, respectively. Assuming that the percentage-of-completion method is used, what amount of gross profit would Frame report during the last year of the project?
Correct! The percentage-of-completion method recognizes revenues based on the percentage of costs incurred to total estimated costs. At the end of year 3 total estimated costs are equal to total actual costs. 70% of gross profit had been recognized at the end of year 2 ($900,000+$500,000/ $2,000,000)=70% and the remaining 30% is recognized at the end of year 3 ($600,000/$2,000,000)=30%. Total gross profit is equal to $500,000 ($2,500,000-$2,000,000) so Frame would report $150,000 in gross profit for year 3 (30% * $500,000) = $150,000.February 16, 2017 at 9:55 am #1479186
Actual cost is 2M not 2.1M,, 500K+900K+600KFebruary 16, 2017 at 9:56 am #1479190
opps hahah,,,cant even add and im taking FAR,,,lovelyFebruary 16, 2017 at 9:58 am #1479193
Mo3athn beat me to it – but thanks, you're helping my confidence! I'm mired in Governmental today but I remembered % Completion without looking it up!February 16, 2017 at 10:00 am #1479195
has anyone seen my motivation today? I seem to have lost it….February 16, 2017 at 10:04 am #1479198
@mckan514w it's over here with me. I'm having my first productive morning in over a week!February 16, 2017 at 10:05 am #1479201
yea mckan i have your motivation,,,but sorry i cant give it back until next ThursFebruary 16, 2017 at 10:07 am #1479204February 16, 2017 at 10:07 am #1479205
This past week I've actually boosted my confidence tremendously..all week ive been filling in the blanks and putting everything together,,,im having that ah ha moment that mtaylo is trying to find
mtaylo,,,u gotta envision the win bro!February 16, 2017 at 10:25 am #1479225
LOL- thanks guys you are AWESOME! and that 74 scares the s-t out of me… brewing another pot of coffee and getting down to it… @sticky you got this man! keep that motivation going- I will try to find some more 🙂February 16, 2017 at 10:37 am #1479232
Maybe someone can help with this on government. When a government plans to honor an outstanding encumbrance (aka a reserve for encumbrance) do you not close the encumbrance out at year end by crediting it, and leaving the reserve open?
According to Gleim the entry is
Dr. Fund Balance – unreserved
Cr. Fund Balance – committed/assigned
They don't touch the word encumbrance. I wonder if Roger is wrong on how he closes out the books.February 16, 2017 at 11:24 am #1479276
In Governmental, the following three transactions were made from the general fund:
Transfer to a debt service fund…..$ 100,000
Payment to a pension trust fund…….500,000
Purchase of equipment……………..300,000
What amount should be reported for the general fund as other financing uses in its governmental funds statement of revenues, expenditures, and changes in fund balances?
The answer was $100,000. I understand that the transfer/debt item is OFS, but I thought the payment to a pension trust fund would also be a transfer out. Anyone know when a transfer to a different fund is NOT considered OFS? Is it because the pension trust is one of the fiduciary funds rather than governmental?February 16, 2017 at 11:25 am #1479282
@ginic the payment to a pension trust fund is a quasi-external transfer. It's an expenditure to the General Fund. The key word is payment and not transfer.February 16, 2017 at 11:35 am #1479289
i think the reserve account stays open dunno why they credit committed though thats diffFebruary 16, 2017 at 11:37 am #1479292
@demarcon Thanks – I keep doing that, reading into the fact pattern. Grr.
On your encumbrance question – Becker closes out encumbrances with two entries
DR Budgetary control
…CR Encumbrance (for the same amount originally debited)
This seems to dump the encumbrance amount into the Unassigned component of the fund
DR Unassigned fund balance
…CR Restricted/committed fund balance
to put the encumbered amount into a protected component of the fund.
It sounds like we are using different names for the fund components. We use
Assigned (earmarked but not approved)
Not Spendable (for inventories/supplies etc.)
Committed (by authorization of the highest government entity)
Restricted (by an external authority, like law, bond covenant, etc.)February 16, 2017 at 11:43 am #1479297
gini go on to next years entries for me,,,,when you get the orderFebruary 16, 2017 at 11:48 am #1479301
@Sticky Nicky Not sure what you mean – my Becker hasn't touched subsequent year entries in any detail, just mentions that everything rolls over.February 16, 2017 at 11:56 am #1479303
hmm Roger goes into the JE for receiving the items in the subsequent year after you closed out encumberance priorFebruary 16, 2017 at 1:10 pm #1479355
@sticky nicky – THAT one we have in Becker too – but not in reference to reserves, it refers to a capital purchase made in Y1 but received in Y2. Following the close-out I had above, in Y2 we record receipt of the item (a fire truck in our example):
DR Expenditure – prior year . Actual amount of purchase
…CR Vouchers payable (for cash). . . . . Same amount
As with yours, no mention of the committed balance. There must be some standard practice or something to pull funds from the right component of the fund balance. I'm not sure I understand how things flow in here, it's too “loose” for my liking. I can't make T accounts and watch the money travel as I can in accrual accounting.February 16, 2017 at 2:23 pm #1479405
How's everyone doing on the IFRS items? I've been working on the F10 mcqs on Becker related to IFRS and I'm really hoping all the questions I get are Lcnrv, OCI and cash flow questions…February 16, 2017 at 2:46 pm #1479429February 16, 2017 at 3:09 pm #1479448
@mtaylo have you done the gleim SIMS yet? Started those today- am rather annoyed that you can't “pick and choose” on them- or if you can I can't figure out how to do it- it seems like you have to do the entire study section???
@nathalia for the first time ever I am actually feeling pretty confident (or at least not like total CRAP) on the IFRS stuff… slight nuances but I feel like I am finally “getting it”… they just require memorization for the most part. I found it helped me going through to note exactly why / how it is different than GAAPFebruary 16, 2017 at 3:16 pm #1479463February 16, 2017 at 3:17 pm #1479465
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