WGU D104 Intermediate Accounting II | PA| Pre -
Assessment | Actual Questions and Answers Latest
Updated 2025/2026 (Graded A+)
/. 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 - Answer-✅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 - Answer-✅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 - Answer-✅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 - Answer-✅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 - Answer-✅Trade Secrets
, /.Pay out ratio - Answer-✅Pay out ratio = cash dividends/net income (less preferred
dividends, if applicable)
/.Return on common stockholders' equity - Answer-✅Return on Common Stockholders'
Equity = (Net Income - Preferred Dividends) / Average Common Stockholders' Equity
/.Book value per share - Answer-✅Book Value per Share = common stockholders
equity/outstanding shares
/.Dilutive Securities - Answer-✅Are securities that can be converted to common stock.
Upon conversion or exercise by the holder, the dilutive securities reduce (dilute)
earnings per share
/.Antidilutive securities - Answer-✅Securities, which upon conversion or exercise,
increase earnings per share (or reduce the loss per share). Companies with complex
capital structures will not report diluted EPS if the securities in their capital structure are
antidilutive; they will report only the basic EPS number.
/.A company using the composite approach to depreciation sells equipment for $10,000.
The equipment was purchased five years earlier for $15,000, and the company has
already recorded $5,000 in accumulated depreciation. What is included in the journal
entry for the sale of the equipment?
Debit loss on sale of equipment for $5,000
Credit loss on sale of equipment for $5,000
Debit accumulated depreciation-equipment for $5,000
Credit accumulated depreciation-equipment for $5,000 - Answer-✅Debit accumulated
depreciation-equipment for $5,000.
/.Several years ago, a company acquired an asset at a cost of $400,000. Last year, the
company recognized an impairment loss of $25,000 and properly reduced the asset's
book value from $250,000 to $225,000.
Using the asset's new base of $225,000, the company calculates depreciation for the
current year to be $10,000, bringing the book value down to $215,000. However, the
company has also determined that the asset's fair value has recovered and is now
estimated to be $260,000.
How should the company measure the asset on its current balance sheet?
The company should reverse the prior impairment and measure the asset at its current
fair value of $260,000.
The company should reverse the prior impairment and measure the asset at its fair
value prior to the initial impairment of $250,000.
The company should not reverse the impairment and should depreciate the asset by
$10,000 to a new book value of $215,000.
Assessment | Actual Questions and Answers Latest
Updated 2025/2026 (Graded A+)
/. 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 - Answer-✅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 - Answer-✅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 - Answer-✅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 - Answer-✅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 - Answer-✅Trade Secrets
, /.Pay out ratio - Answer-✅Pay out ratio = cash dividends/net income (less preferred
dividends, if applicable)
/.Return on common stockholders' equity - Answer-✅Return on Common Stockholders'
Equity = (Net Income - Preferred Dividends) / Average Common Stockholders' Equity
/.Book value per share - Answer-✅Book Value per Share = common stockholders
equity/outstanding shares
/.Dilutive Securities - Answer-✅Are securities that can be converted to common stock.
Upon conversion or exercise by the holder, the dilutive securities reduce (dilute)
earnings per share
/.Antidilutive securities - Answer-✅Securities, which upon conversion or exercise,
increase earnings per share (or reduce the loss per share). Companies with complex
capital structures will not report diluted EPS if the securities in their capital structure are
antidilutive; they will report only the basic EPS number.
/.A company using the composite approach to depreciation sells equipment for $10,000.
The equipment was purchased five years earlier for $15,000, and the company has
already recorded $5,000 in accumulated depreciation. What is included in the journal
entry for the sale of the equipment?
Debit loss on sale of equipment for $5,000
Credit loss on sale of equipment for $5,000
Debit accumulated depreciation-equipment for $5,000
Credit accumulated depreciation-equipment for $5,000 - Answer-✅Debit accumulated
depreciation-equipment for $5,000.
/.Several years ago, a company acquired an asset at a cost of $400,000. Last year, the
company recognized an impairment loss of $25,000 and properly reduced the asset's
book value from $250,000 to $225,000.
Using the asset's new base of $225,000, the company calculates depreciation for the
current year to be $10,000, bringing the book value down to $215,000. However, the
company has also determined that the asset's fair value has recovered and is now
estimated to be $260,000.
How should the company measure the asset on its current balance sheet?
The company should reverse the prior impairment and measure the asset at its current
fair value of $260,000.
The company should reverse the prior impairment and measure the asset at its fair
value prior to the initial impairment of $250,000.
The company should not reverse the impairment and should depreciate the asset by
$10,000 to a new book value of $215,000.
