Intermediate Accounting II - D104 WGU

Intermediate Accounting II - D104 WGU Leave the first rating Students also studied Terms in this set (42) Western Governors UniversityD 103 Save WGU D104 Intermediate Accounting...144 terms kristineburrow Preview Intermediate Accounting II D104; Pr...16 terms AcidApplesPreview

D104 EXAM 2 REVIEW

31 terms ericblake1999 Preview WGU D Teacher Am Which method should be used to handle indirect costs of self-constructed assets?Assigning no variable overhead to a constructed asset Allocating overhead on the basis of gained production Assigning a pro rata portion of all overhead to the asset Allocating the total overhead to the asset Assigning a pro rata portion of all overhead to the asset A company purchases land for development into a subdivision. The land has a factory building on it that will need to be demolished.Where should the interest costs be allocated?Interest expenses General administrative expenses Cost of the land Cost of the plant Cost of land In which situation can capitalization of interest be included in the cost of land?When holding the land as an investment When purchasing land with the intension of developing it for lots sales When selling the land When building a structure on the land When purchasing land with the intension of developing it for lots sales Which value should be used to record machinery that was purchased with a long-term note?Sum of all estimated payments Market price of the machinery Present value of the future payments Appraised value of the machinery Present value of the future payments

Which item is considered to be a technology-related intangible asset?Trade secrets Goodwill Artistic-related rights Licensing agreements Trade Secrets Pay out ratioPay out ratio = cash dividends/net income (less preferred dividends, if applicable) Return on common stockholders' equityReturn on Common Stockholders' Equity = (Net Income - Preferred Dividends) / Average Common Stockholders' Equity Book value per shareBook Value per Share = common stockholders equity/outstanding shares Dilutive SecuritiesAre securities that can be converted to common stock. Upon conversion or exercise by the holder, the dilutive securities reduce (dilute) earnings per share Antidilutive securitiesSecurities, which upon conversion or exercise, increase earnings per share (or reduce the loss per share). Companies with complex capital structures will not report diluted EPS if the securities in their capital structure are antidilutive; they will report only the basic EPS number.A company using the composite approach to depreciation sells equipment for $10,000. The equipment was purchased five years earlier for $15,000, and the company has already recorded $5,000 in accumulated depreciation. What is included in the journal entry for the sale of the equipment?Debit loss on sale of equipment for $5,000 Credit loss on sale of equipment for $5,000 Debit accumulated depreciation-equipment for $5,000 Credit accumulated depreciation-equipment for $5,000 Debit accumulated depreciation-equipment for $5,000.

Several years ago, a company acquired an asset at a cost of $400,000. Last year, the company recognized an impairment loss of $25,000 and properly reduced the asset's book value from $250,000 to $225,000.Using the asset's new base of $225,000, the company calculates depreciation for the current year to be $10,000, bringing the book value down to $215,000.However, the company has also determined that the asset's fair value has recovered and is now estimated to be $260,000.How should the company measure the asset on its current balance sheet?The company should reverse the prior impairment and measure the asset at its current fair value of $260,000.The company should reverse the prior impairment and measure the asset at its fair value prior to the initial impairment of $250,000.The company should not reverse the impairment and should depreciate the asset by $10,000 to a new book value of $215,000.The company should not reverse the impairment and should not depreciate the asset further, leaving the book value at $225,000.The company should not reverse the impairment and should depreciate the asset by $10,000 to a new book value of $215,000.A company invested $15,000,000 in a coal mine estimated to have 1,500,000 tons of coal. In the first year, the company extracted 100,000 tons of coal. At the end of the first year, it became clear that the coal mine was likely to have only another 700,000 tons of coal remaining.Which depletion rate will be used starting in the second year?$6.36 per ton $10.00 per ton $20.00 per ton $21.43 per ton $20.00 per ton On January 1, a company received $24,000 in advance for monthly pest services for the year. Which entry should the company use to record the month of May's revenue?Debit Unearned Sales Revenue for $2,000; Credit Sales Revenue for $2,000 Debit Unearned Sales Revenue for $10,000; Credit Sales Revenue for $10,000 Debit to Sales Revenue for $2,000; Credit Unearned Sales Revenue for $2,000 Debit to Sales Revenue for $10,000; Credit Unearned Sales Revenue for $10,000 Debit Unearned Sales Rev for $2000; Credit Sales Rev for $2000

A company reported the following excerpts from its

balance sheet:

Cash: $150,000

Short-term investments: $350,000

Accounts receivable (net): $200,000

Inventory: $300,000

Property, plant, and equipment (net): $500,000

Total current liabilities: $400,000

What is the company's current ratio?

1.25 1.75 2.50 3.75 2.50 On February 1, a company borrowed $24,600 from a bank. The terms of the loan require five equal annual installments beginning January 31. The company has a calendar year-end. Which entry should the company use to record the loan?Debit cash $24,600, credit current maturities of long-term debt $4,920, credit note payable $19,680 Debit cash $24,600, credit current maturities of long-term debt $4,510, credit note payable $20,090 Debit note payable $20,090, debit current maturities of long-term debt $4,510, credit cash $24,600 Debit note payable $19,680, debit current maturities of long-term debit $4,920, credit cash $24,600 Debit cash $24,600, credit current maturities of long-term debt $4,920, credit note payable $19,680 A company issues bonds at par with a 10-year term for $1,000,000 on January 1 of Year 1. The bonds bear interest at an annual rate of 7% payable semiannually on January 1 and July 1. Which journal entry should be recorded on July

• of Year 1?

Debit Interest Expense for $70,000; Credit Bonds Payable for $70,000 Debit Interest Expense for $70,000; Credit Cash for

$70,000

Debit Interest Expense for $35,000; Credit Cash for

$35,000

Debit Bonds Payable for $35,000: Credit Interest Expense

for $35,000 Debit Interest Expense for $35,000; Credit Cash for $35,000 On July 22, a company issues bonds at 105, bonds with a par value of $1,000,000, due in 20 years. Five years after the issue date, the company calls the entire issue at 101 and redeems it. At that time, the unamortized premium balance is $37,500. What is the effect of this transaction?$27,500 gain $27,500 loss $10,000 gain $10,000 loss $27500 Gain