Exam (elaborations)
WGU D104 INTERMEDIATE ACCOUNTING II UNITS 4-6 QUESTIONS AND ANSWERS WITH SOLUTIONS 2024
- Course
- Institution
WGU D104 INTERMEDIATE ACCOUNTING II UNITS 4-6 QUESTIONS AND ANSWERS WITH SOLUTIONS 2024
[Show more]
Content preview
WGU D104 INTERMEDIATEACCOUNTING II UNITS 4-6 QUESTIONS
AND ANSWERS WITH SOLUTIONS 2024
Asset Turnover Ratio - ANSWER net sales/average total assets
Profit Margin Ratio - ANSWER net income/total sales
Rate of return on assets - ANSWER net income/average total assets
Current ratio - ANSWER current assets/current liabilities
acid-test ratio - ANSWER (cash + short-term investments + net receivables) / current liabilities
rate of return on common stock equity - ANSWER (net income - preferred dividends) / average common
stockholders' equity
payout ratio - ANSWER cash dividends / (net income - preferred dividends)
book value per share - ANSWER common stockholders' equity / outstanding shares
sum-of-the-years'-digits method - ANSWER Accelerated depreciation with higher depreciation cost in
beginning and lower charges in the end. Numerator is the # of years of est. life remaining at the 1st of
the year, denominator is sum of the years individually. (e.g. 5/15, 4/15, 3/15, 2/15, 1/15)
Variable charge depreciation method (activity method or units-of-activity/ production approach) -
ANSWER ((cost - salvage value) X current units) / total estimated units
activity method - ANSWER (actual activity in period / total estimate activity) X (cost - salvage value)
double declining balance method - ANSWER An accelerated depreciation method that computes annual
depreciation by multiplying the depreciable asset's decreasing book value by a constant percent that is
two times the straight-line depreciation rate.
Multiple assets group depreciation method - ANSWER Assets similar in nature and have approx. same
useful lives. Total of the annual depreciation expense for all assets in the group / total cost of the assets.
Multiple assets composite depreciation method - ANSWER Assets are dissimilar and have different lives.
Total annual depreciation expense of all assets / total cost of all assets.
Composite life - ANSWER (Original cost - salvage value) / total annual depreciation
Composite depreciation rate - ANSWER Total annual depreciation of all assets / total cost of all assets.
Journal entry for gain on sale of composite depreciation equipment - ANSWER Debit cash & accumulated
depreciation (subtract gain), credit equipment.
, Impairment - ANSWER If the carrying amount exceeds the undiscounted future cash flows. Loss =
carrying amount > fair value.
Journal entry for impairment - ANSWER Debit impairment loss, credit accumulated depreciation
When is the restoration of an impairment loss permitted? - ANSWER When an assets is held for disposal.
Impairment loss is reported at the lower of cost or net realizable value (fair value - cost to sell/dispose)
not to exceed amount of initial impairment loss.
Depletion base for natural resources - ANSWER (cost to acquire + cost to explore + cost to develop i.e.
intangible costs + cost to restore). Tangible costs to extract resources depreciated separately.
Natural resources depletion rate - ANSWER (depletion base - salvage value) / total units to be recovered.
Natural resources depletion expense - ANSWER (depletion rate X units of usage) / extracted
Journal entry to record ore extracted - ANSWER Debit inventory (ore), credit mineral mine
Journal entry to record the ore sold - ANSWER Debit cost of goods sold, credit inventory (ore)
Journal entry to record depletion expense for mine - ANSWER Debit depletion expense, credit
accumulated depletion
Types of current liabilities - ANSWER Accounts payable, notes payable, dividends payable, customer
advances/deposits, unearned (deferred) revenues, sales tax payable, current maturities of long-term
debt
Journal entry to record issuance of a note - ANSWER Debit cash, credit notes payable
Journal entry to record payment of the note at maturity - ANSWER Debit notes payable, debit interest
expense, credit cash
Journal entry to record issuance of a zero interest bearing note - ANSWER Debit cash, debit discount on
notes payable, credit notes payable
Journal entry to record payment of a zero interest bearing note at maturity - ANSWER Debit notes
payable, credit cash
Journal entry to record sale of gift certificate booklet - ANSWER Debit cash, credit unearned gift card
revenue
Journal entry to record redemption of gift cards - ANSWER debit unearned gift card revenue, credit sales
revenue
Journal entry to record a sale with sales tax and a loss on sales tax - ANSWER Debit cash, debit loss on
sales tax collection, credit sales revenue, credit sales tax payable
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Performance. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $13.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
67096 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now