WGU PA: Accounting II Test Questions
and All Correct Answers.
Which inventory method results in the lowest cost of goods sold and highest net income in a
period of rising prices? - Answer First in, first out
A seller of recreational vehicles (RVs) wants to keep track of the actual cost of each item sold.
Which inventory costing method should this business use to meet this goal? - Answer
Specific identification
$10,989
(50x$105 + 100x$108 + 100x$110 + 200x$112)/450 x (50 + 100 + 100 + 200 - 350) - Answer
$10,989
(50*$105 + 100*$108 + 100*$110 + 200*$112)/450 * (50 + 100 + 100 + 200 - 350)
A company sells baseball bats. The following record shows the inventory activity for the month
of October:
Number of Bats/Unit Cost)
Oct 1 (beginning inventory) (50/$105)
Purchases:
Oct 12 (100/$108)
Oct 20 (100/$110)
Oct 25 (200/$112)
October Sales 350
Using the first in, first out method, what is the value of the inventory on October 31 (rounded to
the nearest dollar)? - Answer $11,200
$112 * (50 + 100 + 100 + 200 - 350)
What is the normal method of amortizing a patent? - Answer Straight line
, In July 2013, a company purchased a mine at a cost of $18,000,000. The mine has an estimated
life of ten years with no estimated salvage value.
The mine is estimated to contain 500,000 tons of ore. During 2013, 120,000 tons of ore were
extracted and sold.
What is the depletion expense in year 2013? - Answer $4,320,000
120,000/500,000 * $18,000,000
A machine was purchased for $95,000. Freight charges amounted to $6,200 and there was a
cost of $33,000 for building a foundation and mounting the machine. It is estimated that the
machine will have a $25,000 salvage value at the end of its five-year useful life.
What will the depreciation expense be each year using the straight-line method? - Answer
$21,840
($95,000 + $6,200 + $33,000 - $25,000)/5
The beginning book value on a piece of machinery was reported at $5,000. The machine has an
overall useful life of four years and no estimated salvage value.
What is the depreciation expense at the end of the first year of operation using the double-
declining-balance? - Answer $2,500
$5,000/2
A manufacturing service just purchased office furniture for $9,000. The furniture has a useful
life of five years and no estimated salvage value.
What will the second year depreciation expense be using the sum-of-the-years-digits method? -
Answer $2,400
On July 1, a company sold a delivery truck for $5,000 cash. The cost of the truck was $30,000.
Accumulated depreciation as of December 31 of the previous year was $24,000. Depreciation
for the first six months of the current year should be $2,000.
and All Correct Answers.
Which inventory method results in the lowest cost of goods sold and highest net income in a
period of rising prices? - Answer First in, first out
A seller of recreational vehicles (RVs) wants to keep track of the actual cost of each item sold.
Which inventory costing method should this business use to meet this goal? - Answer
Specific identification
$10,989
(50x$105 + 100x$108 + 100x$110 + 200x$112)/450 x (50 + 100 + 100 + 200 - 350) - Answer
$10,989
(50*$105 + 100*$108 + 100*$110 + 200*$112)/450 * (50 + 100 + 100 + 200 - 350)
A company sells baseball bats. The following record shows the inventory activity for the month
of October:
Number of Bats/Unit Cost)
Oct 1 (beginning inventory) (50/$105)
Purchases:
Oct 12 (100/$108)
Oct 20 (100/$110)
Oct 25 (200/$112)
October Sales 350
Using the first in, first out method, what is the value of the inventory on October 31 (rounded to
the nearest dollar)? - Answer $11,200
$112 * (50 + 100 + 100 + 200 - 350)
What is the normal method of amortizing a patent? - Answer Straight line
, In July 2013, a company purchased a mine at a cost of $18,000,000. The mine has an estimated
life of ten years with no estimated salvage value.
The mine is estimated to contain 500,000 tons of ore. During 2013, 120,000 tons of ore were
extracted and sold.
What is the depletion expense in year 2013? - Answer $4,320,000
120,000/500,000 * $18,000,000
A machine was purchased for $95,000. Freight charges amounted to $6,200 and there was a
cost of $33,000 for building a foundation and mounting the machine. It is estimated that the
machine will have a $25,000 salvage value at the end of its five-year useful life.
What will the depreciation expense be each year using the straight-line method? - Answer
$21,840
($95,000 + $6,200 + $33,000 - $25,000)/5
The beginning book value on a piece of machinery was reported at $5,000. The machine has an
overall useful life of four years and no estimated salvage value.
What is the depreciation expense at the end of the first year of operation using the double-
declining-balance? - Answer $2,500
$5,000/2
A manufacturing service just purchased office furniture for $9,000. The furniture has a useful
life of five years and no estimated salvage value.
What will the second year depreciation expense be using the sum-of-the-years-digits method? -
Answer $2,400
On July 1, a company sold a delivery truck for $5,000 cash. The cost of the truck was $30,000.
Accumulated depreciation as of December 31 of the previous year was $24,000. Depreciation
for the first six months of the current year should be $2,000.
