Intermediate Accounting II - D104 WGU
ACTUAL QUESTIONS AND CORRECT
ANSWERS
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 - CORRECT ANSWERS 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 - CORRECT ANSWERS 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 - CORRECT ANSWERS 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 - CORRECT ANSWERS 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 - CORRECT ANSWERS Trade Secrets
Pay out ratio - CORRECT ANSWERS Pay out ratio = cash dividends/net income (less
preferred dividends, if applicable)
Return on common stockholders' equity - CORRECT ANSWERS Return on Common
Stockholders' Equity = (Net Income - Preferred Dividends) / Average Common Stockholders'
Equity
Book value per share - CORRECT ANSWERS Book Value per Share = common
stockholders equity/outstanding shares
Dilutive Securities - CORRECT ANSWERS Are securities that can be converted to
common stock. Upon conversion or exercise by the holder, the dilutive securities reduce (dilute)
earnings per share
ACTUAL QUESTIONS AND CORRECT
ANSWERS
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 - CORRECT ANSWERS 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 - CORRECT ANSWERS 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 - CORRECT ANSWERS 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 - CORRECT ANSWERS 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 - CORRECT ANSWERS Trade Secrets
Pay out ratio - CORRECT ANSWERS Pay out ratio = cash dividends/net income (less
preferred dividends, if applicable)
Return on common stockholders' equity - CORRECT ANSWERS Return on Common
Stockholders' Equity = (Net Income - Preferred Dividends) / Average Common Stockholders'
Equity
Book value per share - CORRECT ANSWERS Book Value per Share = common
stockholders equity/outstanding shares
Dilutive Securities - CORRECT ANSWERS Are securities that can be converted to
common stock. Upon conversion or exercise by the holder, the dilutive securities reduce (dilute)
earnings per share
