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TheRedRoost3r
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Posted: 19 Dec 2008 at 06:21 \| IP Logged

I'm doing the passmaster software for F8 and I'm getting ~50% of the questions wrong. A lot of the questions were not covered AT ALL in the book, wtf????!!!! Did anyone else have trouble with this??

For example:

In 1993, Palm City acquired, through forfeiture as a result of nonpayment of property taxes, a parcel of land that the city intends to use as a parking lot for general governmental purposes. The total amount of taxes, liens, and other costs incurred by Palm incidental to acquiring ownership and perfecting title was $20,000. The land's fair market value at the forfeiture date was $60,000. What amount should Palm City capitalize relative to its governmental activities?

a. 0
b. 20,000
c. 60,000
d. 80,000

Answer: B. However, Mr Gearty kept repeating that nothing is capitalized, ever. Everything is an expenditure. Also, I did a search for capitalization in the book and only found this, which does not help answer the question: "Fixed assets are often not expected to contribute to the generation of revenue. The acquiring of a fixed asset, therefore, is not capitalized on the fund's books." (source: F8-22)

What gives????????

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HoustonCPA123
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Posted: 19 Dec 2008 at 12:01 \| IP Logged

Let me try this while my memory is still there.

When you see "relative to its governmental activities", it means governmetal wide financial statment, not fund FS. Gov't wide FS uses full accrual basis, which means capitalizing land at cost. the actual cost is only $20,000 paid for the title, the FMV is not relevant, GAAP historical cost principal.

Always remember to differentiate Fund FS and GOv't wide FS. Gov't accounting on the exam is very theory based, know the principal, you will be able to answer majority of questions correctly.

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TheRedRoost3r
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Posted: 24 Dec 2008 at 05:09 \| IP Logged

Exactly, HoustonCPA123.

If I could go back in time I would tell myself to just chill, just watch the lectures and go onto F9 and do the homework later. You won't start understanding what everything means until F9 anyways.

__________________
EY Bay Area
USC Grad Student '09
----------------------
BEC - Oct 10: 88
AUD - Nov 21: 90
REG - Feb 6: 89
FAR - Jan 3: 92
CA Ethics: 96

minicre
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Posted: 25 Dec 2008 at 01:17 \| IP Logged

Im not going to attempt to answer that Q bc I am way over FARE mentally, BUT you do need to know F8 and 9 inside and out. With that being said, if you are stuck on anything and getting 50% on the hw's, that is OKAY! Just move on, and go back to it. I promise the second time around will be sooo much easier.

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ALL DONE on 1st TRY, w/Becker!

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