5/20/25, 9:14 PM WGU D105 OA
WGU D105 OA | Objective Assessment | Explore
New 181 Questions and Answers | 2025 Update |
100% Correct.
Correct
Incorrect
WGU D105 OA
181 Correct terms
Questions and answers
,5/20/25, 9:14 PM WGU D105 OA
($30,000)
Lease expense
I, II, and IV
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2 of 181
Term
What is the cash flow from financing activities?
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The assertion that certain types of
companies should not have to follow
$129,000
complex requirements such as
deferred expenses
To define the benefits that the
employee will receive at the time of ($14,000)
retirement
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,5/20/25, 9:14 PM WGU D105 OA
3 of 181
Term
Haystack, Inc. manufactures machinery used in the mining industry. On
January 2, 2021, it leased equipment with a cost of $480,000 to Silver
Point Co. The 5-year lease calls for a 10% down payment and equal
annual payments of $175,820 at the end of each year. The equipment
has an expected useful life of 5 years. Silver Point's incremental
borrowing rate is 10%, and it depreciates similar equipment using the
double-declining balance method. The selling price of the equipment
is $780,000, and the rate implicit in the lease is 8%, which is known to
Silver Point Co. What is Silver Point's book value of the leased asset at
December 31, 2021?
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It should amortize $14,538 using the economic life of the computers
Credit Retained Earnings for $6,560,000
$6,560,000 = $8,000,000 - ($8,000,000 x 0.18). The understated inventory would
result in an overstated cost of goods sold and thus an understated income tax
expense. This means net income is understated and would be corrected by a credit
to Retained Earnings.
$33,522
$33,522 = $40,000 - $6,478. Company A will record the asset at the amount it will
pay in lease payments over the lease term. This amount is determined by using the
fair value of the asset, less the present value of the residual value.
, 5/20/25, 9:14 PM WGU D105 OA
$468,000
Correct. Because the lease term is equal to the expected economic life of the
asset, this is a finance lease. Silver Point record the asset at the sales price of
$780,000 less depreciation in 2021. 100% divided by 5 years is 20% per year or
40% using a double-declining balance method. Therefore, Silver Point's book
value is: [$780,000 - (780,000 x 40%)] = $468,000.
Don't know?
4 of 181
Term
On July 1, 2020, Elberta Corp. acquired equipment at a cost of
$1,020,000. It is to be depreciated on the straight-line method over a
four-year period with no residual value. Because of a bookkeeping
error, no depreciation was recognized in Elberta's 2020 financial
statements. The oversight was discovered during the preparation of
Elberta's 2021 financial statements. Which account will be affected by
correcting the error that occurred in 2020, assuming comparative
financial statements are not prepared?
Give this one a go later!
Depreciation expense Amortization
Retained earnings Accumulated depreciation
Don't know?
WGU D105 OA | Objective Assessment | Explore
New 181 Questions and Answers | 2025 Update |
100% Correct.
Correct
Incorrect
WGU D105 OA
181 Correct terms
Questions and answers
,5/20/25, 9:14 PM WGU D105 OA
($30,000)
Lease expense
I, II, and IV
Don't know?
2 of 181
Term
What is the cash flow from financing activities?
Give this one a go later!
The assertion that certain types of
companies should not have to follow
$129,000
complex requirements such as
deferred expenses
To define the benefits that the
employee will receive at the time of ($14,000)
retirement
Don't know?
,5/20/25, 9:14 PM WGU D105 OA
3 of 181
Term
Haystack, Inc. manufactures machinery used in the mining industry. On
January 2, 2021, it leased equipment with a cost of $480,000 to Silver
Point Co. The 5-year lease calls for a 10% down payment and equal
annual payments of $175,820 at the end of each year. The equipment
has an expected useful life of 5 years. Silver Point's incremental
borrowing rate is 10%, and it depreciates similar equipment using the
double-declining balance method. The selling price of the equipment
is $780,000, and the rate implicit in the lease is 8%, which is known to
Silver Point Co. What is Silver Point's book value of the leased asset at
December 31, 2021?
Give this one a go later!
It should amortize $14,538 using the economic life of the computers
Credit Retained Earnings for $6,560,000
$6,560,000 = $8,000,000 - ($8,000,000 x 0.18). The understated inventory would
result in an overstated cost of goods sold and thus an understated income tax
expense. This means net income is understated and would be corrected by a credit
to Retained Earnings.
$33,522
$33,522 = $40,000 - $6,478. Company A will record the asset at the amount it will
pay in lease payments over the lease term. This amount is determined by using the
fair value of the asset, less the present value of the residual value.
, 5/20/25, 9:14 PM WGU D105 OA
$468,000
Correct. Because the lease term is equal to the expected economic life of the
asset, this is a finance lease. Silver Point record the asset at the sales price of
$780,000 less depreciation in 2021. 100% divided by 5 years is 20% per year or
40% using a double-declining balance method. Therefore, Silver Point's book
value is: [$780,000 - (780,000 x 40%)] = $468,000.
Don't know?
4 of 181
Term
On July 1, 2020, Elberta Corp. acquired equipment at a cost of
$1,020,000. It is to be depreciated on the straight-line method over a
four-year period with no residual value. Because of a bookkeeping
error, no depreciation was recognized in Elberta's 2020 financial
statements. The oversight was discovered during the preparation of
Elberta's 2021 financial statements. Which account will be affected by
correcting the error that occurred in 2020, assuming comparative
financial statements are not prepared?
Give this one a go later!
Depreciation expense Amortization
Retained earnings Accumulated depreciation
Don't know?
