WGU D104 Intermediate Accounting II Units 4-6 Exam with Verified Solutions 2024

WGU D104 Intermediate Accounting II Units 4-6 Exam with Verified 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 accumu