WGU D366 SECTION 2 |
93 QUESTIONS | WITH
ALREADY PASSED
SOLUTIONS!!
D366 Evatee8/10/24WGU D366 1 / 3
WGU D366 SECTION 2 | 93 QUESTIONS |
WITH ALREADY PASSED SOLUTIONS!!
What constitutes representational fairness of financial information? Answer - An error-free accounts receivable balance What is one challenge in valuing assets and liabilities under the mixed attribute measurement model? Answer - Deciding on the proper valuation method of certain assets and liabilities Valuation methods include historical, fair value, and mixes of the two. Each method will give different results, affecting both the balance sheet and income statement.A company purchased a truck with a list price of $200,000 subject to a 5% discount if paid within 30 days. The company paid within 30 days, so it received the discount. It paid $3,000 to obtain the title to the truck and a $700 license fee for the first year of operation. It paid $1,000 to paint the firm's name on the truck and $2,000 for property and liability insurance for the first year of operation.What is the acquisition cost of this truck that the company should record in its accounting records? Answer - $194,000 An aircraft manufacturer sold a plane to an airline on January 1, 2020. The sales agreement required the airline to pay $1 million immediately and $1 million on December 31 of each year for 20 years, beginning on December 31,
- The aircraft manufacturer and airline agree that 7% is an appropriate
interest rate for this arrangement.What is the present value of the receivable on the aircraft manufacturer's books on January 1, 2020, immediately after receiving the $1 million down payment? Answer - $10,594,014 2 / 3
A company purchased land, prepared it for use, and constructed a building on
it. The costs were as follows:
Purchase price of the land$250,000Commission paid to real estate agent$10,000Rezoning permit fee$7,500Cost of razing and removing existing building$25,000Cash received for scraps of old building materials$7,000Construction cost of new building$500,000Cost of landscaping the property$28,000Cost of property taxes for first year of occupation$15,000 What should the company record as the cost of the land on the balance sheet?Answer - $285,500 Which of these would be recorded on a company's balance sheet as an asset?Answer - An increase in the value of stocks of another company held as an investment What represents an exchange of economic value in terms of revenue recognition? Answer - Comprehensive income is realized in a market transaction Two friends contribute $40,000 each to form a new business. The owners use this amount to purchase a piece of equipment for $80,000 cash. They estimated that the useful life of the equipment is five years, and the salvage value is $15,000. They rent out the equipment to a customer for an annual rental of $20,000 per year for five years. Annual cash operating costs for insurance, taxes, and the other items total $5,000 annually. At the end of the fifth year, the owners sell the equipment for $18,000 instead of the original estimated $15,000 salvage value.What is the total net income for the five-year period? Answer - $13,000 Two friends contribute $40,000 each to form a new business. The owners use the contriubtions to purchase a piece of equipment for $80,000 cash. They estimate that the useful life of the equipment is five years, and the salvage
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