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WGU D104 Pre- Assessment V2– Intermediate Accounting II (Latest 2026/ 2027 Update) 100% Verified Questions & Answers | Grade A

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WGU D104 Pre- Assessment V2– Intermediate Accounting II (Latest 2026/ 2027 Update) 100% Verified Questions & Answers | Grade A QUESTION A company's profit margin on sales was 2.50%, and its asset turnover was 0.50. What was the company's return on assets for this period? 0.20% 1.25% 5.00% 125.00% Answer: 1.25% Profit Margin on Sales*Asset Turnover 2.5*.5 QUESTION A company reported the following information in its 2019 annual report: Net sales $ 750,000 Total assets at the end of year 2 $ 500,000 Total assets at the end of year 1 $ 450,000 Net income $ 120,000 What is the company's profit margin on sales? 16% 84% 417% 625% Answer: 16% Net Income/Net Sales $120,000/$750,000 = .16 QUESTION A company reported the following information in its 2019 annual report: Net sales $ 750,000 Total assets at the end of year 2 $ 500,000 Total assets at the end of year 1 $ 450,000 Net income $ 120,000 What is the company's return on assets? 0.24 0.25 1.58 1.67 Answer: 0.25 Net Income/Ave. Total Assets QUESTION A local restaurant has taken a $40,000 loan from their bank to perform needed renovations. The restaurant must repay the borrowed funds in eight months with 3% interest. How should the restaurant record the loan? Answer: Debit Cash for $40,000; Credit Notes Payable for $40,000 QUESTION 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? Answer: Debit Unearned Sales Revenue for $2,000; Credit Sales Revenue for $2,000 QUESTION A company's normal operating cycle is one year, and they have the following account balances taken from the trial balance: Accounts payable: $50,000 Accounts receivable: $25,000 Notes payable (due in 30 months): $15,000 Customer advances: $10,000 Bonds payable (due in 60 months): $30,000 Sales tax payable: $5,000 Which amount should be included as current liabilities on the balance sheet? Answer: $65,000 Accounts Payable+Customer Advances+Sales Tax Payable QUESTION A manufacturing company produced 900 items this year. By December 31, 850 of the items were sold. The company also sells an extended warranty at a cost of $50 per item. Warranties were purchased on 725 of the items. The company incurred and paid an average of $35 per item warranty expense this year. Which amount of unearned warranty revenue should be recorded at the time of the sale? Answer: $36,250 $50*725=$36,250 QUESTION A corporation has been sued by a customer, and legal counsel believes it is probable that the corporation will lose the lawsuit. The loss is estimated to be $500,000. What is the proper presentation and disclosure for this lawsuit? Answer: The corporation will record a $500,000 loss contingency and related liability. The corporation also will disclose the nature of the contingency. QUESTION 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? Answer: 2.50 Current Assets/Current Liabilities (Cash+Short-Term Investments+Accounts Rec.+Inventory)/Current Liabilities QUESTION 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? Answer: Debit cash $24,600, credit current maturities of long-term debt $4,920, credit note payable $19,680 QUESTION A company issues $10,000,000 in 20-year bonds at a 9% interest rate, paid annually. On the issue date, the bonds sold for $9,875,000. At which value were the bonds issued? Answer: Discount QUESTION 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 1 of Year 1? Answer: Debit Interest Expense for $35,000; Credit Cash for $35,000 QUESTION A company issues bonds with a face value of $1,000,000 with a 10-year term at 95 on January 1 of Year 1. The bonds bear interest at an annual rate of 5% payable semiannually on January 1 and July 1. Which journal entry should be recorded on January 1 of Year 1? Answer: Debit Cash for $950,000; Debit Discount on Bonds Payable for $50,000; Credit Bonds Payable for $1,000,000 QUESTION 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? Answer: $27,500 gain QUESTION A company issued a 30-year mortgage note with a face value of $425,000 to purchase a new production plant. The lender assessed 3 points to close the financing. Which amount should be recorded on the balance sheet for the Mortgage Note Payable? Answer: $425,000 QUESTION On January 1 in Year 1 a company signs a three-year $100,000 note with a stated and effective interest rate of 8%. Interest payments are made annually on the anniversary of the note, and the principal will be paid in a lump sum when the note matures. How much interest should the company pay on January 1 in Year 2? Answer: $8,000 $100,000*.08 = $8,000 QUESTION A company reports the following financial information: Net income: $45,000 Interest expense: $13,000 Income tax expense: $9,000 R&D expense: $8,000 Operating income: $70,000 What is the company's times interest earned? Answer: 5.15 (Net Income+Interest Expense+Interest Tax Expense)/Interst Expense ($45,000+$13,000+$9,000)/$13,000=5.15 QUESTION A share of stock has a preemptive right. From which event is the stockholder protected? Answer: Involuntary dilution of ownership interest

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WGUl D104l Pre-l Assessmentl V2–l
Intermediatel Accountingl IIl (Latestl 2026/l
2027l Update)l 100%l Verifiedl Questionsl &l
Answersl |l Gradel A
Q:l Al company'sl profitl marginl onl salesl wasl 2.50%,l andl itsl assetl turnoverl wasl 0.50.l
Whatl wasl thel company'sl returnl onl assetsl forl thisl period?
0.20%
1.25%
5.00%
125.00%
Answer:
1.25%
Profitl Marginl onl Sales*Assetl Turnoverl
2.5*.5


Q:l Al companyl reportedl thel followingl informationl inl itsl 2019l annuall report:l
Netl salesl $l 750,000
Totall assetsl atl thel endl ofl yearl 2l $l 500,000
Totall assetsl atl thel endl ofl yearl 1l $l 450,000
Netl incomel $l 120,000
l Whatl isl thel company'sl profitl marginl onl sales?
16%
84%
417%
625%
Answer:
16%
Netl Income/Netl Salesl
$120,000/$750,000l =l .16


Q:l Al companyl reportedl thel followingl informationl inl itsl 2019l annuall report:l
Netl salesl $l 750,000
Totall assetsl atl thel endl ofl yearl 2l $l 500,000
Totall assetsl atl thel endl ofl yearl 1l $l 450,000

,Netl incomel $l 120,000
l Whatl isl thel company'sl returnl onl assets?
0.24
0.25
1.58
1.67
Answer:
0.25
Netl Income/Ave.l Totall Assets


Q:l Al locall restaurantl hasl takenl al $40,000l loanl froml theirl bankl tol performl neededl
renovations.l Thel restaurantl mustl repayl thel borrowedl fundsl inl eightl monthsl withl 3%l
interest.l Howl shouldl thel restaurantl recordl thel loan?
Answer:
Debitl Cashl forl $40,000;l Creditl Notesl Payablel forl $40,000


Q:l Onl Januaryl 1,l al companyl receivedl $24,000l inl advancel forl monthlyl pestl servicesl
forl thel year.l Whichl entryl shouldl thel companyl usel tol recordl thel monthl ofl May'sl
revenue?
Answer:
Debitl Unearnedl Salesl Revenuel forl $2,000;l Creditl Salesl Revenuel forl $2,000


Q:l Al company'sl normall operatingl cyclel isl onel year,l andl theyl havel thel followingl
accountl balancesl takenl froml thel triall balance:
Accountsl payable:l $50,000
Accountsl receivable:l $25,000
Notesl payablel (duel inl 30l months):l $15,000
Customerl advances:l $10,000
Bondsl payablel (duel inl 60l months):l $30,000
Salesl taxl payable:l $5,000
l Whichl amountl shouldl bel includedl asl currentl liabilitiesl onl thel balancel sheet?
Answer:
$65,000
Accountsl Payable+Customerl Advances+Salesl Taxl Payable


Q:l Al manufacturingl companyl producedl 900l itemsl thisl year.l Byl Decemberl 31,l 850l ofl
thel itemsl werel sold.l Thel companyl alsol sellsl anl extendedl warrantyl atl al costl ofl $50l
perl item.l Warrantiesl werel purchasedl onl 725l ofl thel items.l Thel companyl incurredl andl

,paidl anl averagel ofl $35l perl iteml warrantyl expensel thisl year.l Whichl amountl ofl
unearnedl warrantyl revenuel shouldl bel recordedl atl thel timel ofl thel sale?
Answer:
$36,250
$50*725=$36,250


Q:l Al corporationl hasl beenl suedl byl al customer,l andl legall counsell believesl itl isl
probablel thatl thel corporationl willl losel thel lawsuit.l Thel lossl isl estimatedl tol bel
$500,000.l Whatl isl thel properl presentationl andl disclosurel forl thisl lawsuit?
Answer:
Thel corporationl willl recordl al $500,000l lossl contingencyl andl relatedl liability.l Thel
corporationl alsol willl disclosel thel naturel ofl thel contingency.


Q:l Al companyl reportedl thel followingl excerptsl froml itsl balancel sheet:l
Cash:l $150,000
Short-terml investments:l $350,000
Accountsl receivablel (net):l $200,000
Inventory:l $300,000
Property,l plant,l andl equipmentl (net):l $500,000
Totall currentl liabilities:l $400,000
l Whatl isl thel company'sl currentl ratio?
Answer:
2.50
Currentl Assets/Currentl Liabilitiesl
(Cash+Short-Terml Investments+Accountsl Rec.+Inventory)/Currentl Liabilities


Q:l Onl Februaryl 1,l al companyl borrowedl $24,600l froml al bank.l Thel termsl ofl thel
loanl requirel fivel equall annuall installmentsl beginningl Januaryl 31.l Thel companyl hasl al
calendarl year-end.l Whichl entryl shouldl thel companyl usel tol recordl thel loan?
Answer:
Debitl cashl $24,600,l creditl currentl maturitiesl ofl long-terml debtl $4,920,l creditl notel
payablel $19,680


Q:l Al companyl issuesl $10,000,000l inl 20-yearl bondsl atl al 9%l interestl rate,l paidl
annually.l Onl thel issuel date,l thel bondsl soldl forl $9,875,000.l Atl whichl valuel werel thel
bondsl issued?
Answer:
Discount

, Q:l Al companyl issuesl bondsl atl parl withl al 10-yearl terml forl $1,000,000l onl Januaryl 1l
ofl Yearl 1.l Thel bondsl bearl interestl atl anl annuall ratel ofl 7%l payablel semiannuallyl onl
Januaryl 1l andl Julyl 1.l Whichl journall entryl shouldl bel recordedl onl Julyl 1l ofl Yearl 1?
Answer:
Debitl Interestl Expensel forl $35,000;l Creditl Cashl forl $35,000


Q:l Al companyl issuesl bondsl withl al facel valuel ofl $1,000,000l withl al 10-yearl terml atl
95l onl Januaryl 1l ofl Yearl 1.l Thel bondsl bearl interestl atl anl annuall ratel ofl 5%l payablel
semiannuallyl onl Januaryl 1l andl Julyl 1.l Whichl journall entryl shouldl bel recordedl onl
Januaryl 1l ofl Yearl 1?
Answer:
Debitl Cashl forl $950,000;l Debitl Discountl onl Bondsl Payablel forl $50,000;l Creditl Bondsl
Payablel forl $1,000,000


Q:l Onl Julyl 22,l al companyl issuesl bondsl atl 105,l bondsl withl al parl valuel ofl
$1,000,000,l duel inl 20l years.l Fivel yearsl afterl thel issuel date,l thel companyl callsl thel
entirel issuel atl 101l andl redeemsl it.l Atl thatl time,l thel unamortizedl premiuml balancel isl
$37,500.l Whatl isl thel effectl ofl thisl transaction?
Answer:
$27,500l gain


Q:l Al companyl issuedl al 30-yearl mortgagel notel withl al facel valuel ofl $425,000l tol
purchasel al newl productionl plant.l Thel lenderl assessedl 3l pointsl tol closel thel financing.l
Whichl amountl shouldl bel recordedl onl thel balancel sheetl forl thel Mortgagel Notel Payable?
Answer:
$425,000


Q:l Onl Januaryl 1l inl Yearl 1l al companyl signsl al three-yearl $100,000l notel withl al
statedl andl effectivel interestl ratel ofl 8%.l Interestl paymentsl arel madel annuallyl onl thel
anniversaryl ofl thel note,l andl thel principall willl bel paidl inl al lumpl suml whenl thel notel
matures.l Howl muchl interestl shouldl thel companyl payl onl Januaryl 1l inl Yearl 2?
Answer:
$8,000
$100,000*.08l =l $8,000


Q:l Al companyl reportsl thel followingl financiall information:

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