WGUl D104l Objectivel Assessmentl V1l –l
Intermediatel Accountingl IIl Reviewl
(Latestl 2026/l 2027l Update)l 100%l
Verifiedl Questionsl &l Answersl |l Gradel A
Q:l Jamisonl Companyl purchasedl thel assetsl ofl Bookerl Companyl atl anl auctionl forl
$5,600,000.l Anl independentl appraisall ofl thel fairl valuel ofl thel assetsl isl listedl below:
Landl $1,900,000
Buildingl $2,800,000
Equipmentl $2,100,000
Trucksl $3,400,000
l
Assumingl thatl specificl identificationl costsl arel impracticablel andl thatl Jamisonl allocatesl
thel purchasel pricel onl thel basisl ofl thel relativel fairl values,l whatl amountl wouldl bel
allocatedl tol thel trucks?
Answer:
$1,866,667
Whenl al purchasel isl madel atl al lump-suml price,l thel companyl allocatesl thel costl basedl
onl thel relativel fairl valuesl ofl thel assets.l Therefore,l thel valuel allocatedl tol thel trucksl is:l
$5,600,000l xl [l $3,400,000l /l ($1,900,000l +l $2,800,000l +l $2,100,000l +l $3,400,000)]l =l
$1,866,667.
Q:l Onl Septemberl 10,l 2020,l Jenksl Co.l incurredl thel followingl costsl forl onel ofl itsl
printingl presses:
Purchasel ofl attachmentl $55,000
Installationl ofl attachmentl $5,000
Replacementl partsl forl renovationl ofl pressl $18,000
Laborl andl overheadl inl connectionl withl renovationl ofl pressl $7,000
l
Neitherl thel attachmentl norl thel renovationl increasedl thel estimatedl usefull lifel ofl thel
press.l However,l thel renovationl resultedl inl significantlyl increasedl productivity.l Whatl
amountl ofl thel costsl shouldl bel capitalized?
,Answer:
$85,000
Ifl anl improvement,l orl renovation,l increasesl thel thel outputl orl qualityl ofl anl asset,l alll ofl
thel costsl associatedl withl thel additionl orl improvementl shouldl bel capitalized.l Therefore,l
thel costsl thatl shouldl bel capitalizedl is:l $55,000l +l $5,000l +l $18,000l +l $7,000l =l
$85,000
Q:l Eckerl Companyl purchasedl al newl machinel onl Mayl 1,l 2012l forl $528,000.l Atl thel
timel ofl acquisition,l thel machinel wasl estimatedl tol havel al usefull lifel ofl tenl yearsl andl
anl estimatedl salvagel valuel ofl $24,000.l Thel companyl hasl recordedl monthlyl depreciationl
usingl thel straight-linel method.l Onl Marchl 1,l 2021,l thel machinel wasl soldl forl $72,000.
l
Whatl shouldl bel thel lossl recognizedl froml thel salel ofl thel machine?
Answer:
$10,800
Depreciablel Basisl =l $528,000l lessl $24,000l (salvagel value)l =l $504,000l Depreciationl =l
$504,000l /l 10l yearsl =l 50,400l /l yearl =l $4,200l /l monthl depreciation.l Bookl Basisl =l
$528,000l -l (4,200l xl 106l months)l =l $82,800l Salesl Pricel -l Bookl Basisl =l Gain/Lossl
$72,000l -l 82,800l =l $10,800l Loss
Q:l Whatl isl truel regardingl al purchasedl limited-lifel intangiblel asset?
Answer:
Itl isl amortized;l testedl forl recoverabilityl test,l andl fairl valuel tested.
Q:l Whichl isl truel concerningl intangiblel assets?
Answer:
Intangiblel assetsl derivel theirl valuel froml thel rightsl andl privilegesl grantedl tol thel
companyl usingl them.
Q:l Whichl characteristicl dol intangiblel assetsl possess?
, Answer:
Long-lived
Q:l Howl arel costsl incurredl internallyl tol createl intangiblesl treated?
Answer:
Theyl arel expensedl asl incurred.
Q:l Whatl wouldl marketing-relatedl intangiblesl include?
Answer:
Al tradel name
Q:l Tiburonl Corporationl purchasedl al patentl forl $1,850,000l onl Novemberl 30,l 2018.l Itl
hasl al remainingl legall lifel ofl 18l years.l Tiburonl estimatesl thatl thel remainingl usefull lifel
ofl thel patentl isl 15l years.l Whatl balancel willl bel reportedl onl thel Decemberl 31,l 2020l
balancel sheetl forl thel patentl (ifl necessary,l roundl yourl answerl tol thel nearestl dollar)?
Answer:
$1,593,056
Patentsl arel amortizedl usingl thel straight-linel methodl overl thel shorterl ofl thel usefull lifel
andl thel legall lifel ofl thel asset.l Onl Decemberl 31,l 2020,l thel assetl wouldl bel amortizedl
forl 25l monthsl [1l monthl inl 2018l +l 12l monthsl inl 2019l +l 12l monthsl inl 2020].l
$1,850,000l /l 180l monthsl =l monthlyl amortizationl ofl $10,277.78l xl 25l monthsl =l
$256,944.50l totall amortizationl expense.l Thel bookl valuel atl Decemberl 31,l 2020l isl
$1,593,056l ($1,850,000l -l $256,944.50).
Q:l Whatl isl al federallyl grantedl right?
Answer:
Copyright
Intermediatel Accountingl IIl Reviewl
(Latestl 2026/l 2027l Update)l 100%l
Verifiedl Questionsl &l Answersl |l Gradel A
Q:l Jamisonl Companyl purchasedl thel assetsl ofl Bookerl Companyl atl anl auctionl forl
$5,600,000.l Anl independentl appraisall ofl thel fairl valuel ofl thel assetsl isl listedl below:
Landl $1,900,000
Buildingl $2,800,000
Equipmentl $2,100,000
Trucksl $3,400,000
l
Assumingl thatl specificl identificationl costsl arel impracticablel andl thatl Jamisonl allocatesl
thel purchasel pricel onl thel basisl ofl thel relativel fairl values,l whatl amountl wouldl bel
allocatedl tol thel trucks?
Answer:
$1,866,667
Whenl al purchasel isl madel atl al lump-suml price,l thel companyl allocatesl thel costl basedl
onl thel relativel fairl valuesl ofl thel assets.l Therefore,l thel valuel allocatedl tol thel trucksl is:l
$5,600,000l xl [l $3,400,000l /l ($1,900,000l +l $2,800,000l +l $2,100,000l +l $3,400,000)]l =l
$1,866,667.
Q:l Onl Septemberl 10,l 2020,l Jenksl Co.l incurredl thel followingl costsl forl onel ofl itsl
printingl presses:
Purchasel ofl attachmentl $55,000
Installationl ofl attachmentl $5,000
Replacementl partsl forl renovationl ofl pressl $18,000
Laborl andl overheadl inl connectionl withl renovationl ofl pressl $7,000
l
Neitherl thel attachmentl norl thel renovationl increasedl thel estimatedl usefull lifel ofl thel
press.l However,l thel renovationl resultedl inl significantlyl increasedl productivity.l Whatl
amountl ofl thel costsl shouldl bel capitalized?
,Answer:
$85,000
Ifl anl improvement,l orl renovation,l increasesl thel thel outputl orl qualityl ofl anl asset,l alll ofl
thel costsl associatedl withl thel additionl orl improvementl shouldl bel capitalized.l Therefore,l
thel costsl thatl shouldl bel capitalizedl is:l $55,000l +l $5,000l +l $18,000l +l $7,000l =l
$85,000
Q:l Eckerl Companyl purchasedl al newl machinel onl Mayl 1,l 2012l forl $528,000.l Atl thel
timel ofl acquisition,l thel machinel wasl estimatedl tol havel al usefull lifel ofl tenl yearsl andl
anl estimatedl salvagel valuel ofl $24,000.l Thel companyl hasl recordedl monthlyl depreciationl
usingl thel straight-linel method.l Onl Marchl 1,l 2021,l thel machinel wasl soldl forl $72,000.
l
Whatl shouldl bel thel lossl recognizedl froml thel salel ofl thel machine?
Answer:
$10,800
Depreciablel Basisl =l $528,000l lessl $24,000l (salvagel value)l =l $504,000l Depreciationl =l
$504,000l /l 10l yearsl =l 50,400l /l yearl =l $4,200l /l monthl depreciation.l Bookl Basisl =l
$528,000l -l (4,200l xl 106l months)l =l $82,800l Salesl Pricel -l Bookl Basisl =l Gain/Lossl
$72,000l -l 82,800l =l $10,800l Loss
Q:l Whatl isl truel regardingl al purchasedl limited-lifel intangiblel asset?
Answer:
Itl isl amortized;l testedl forl recoverabilityl test,l andl fairl valuel tested.
Q:l Whichl isl truel concerningl intangiblel assets?
Answer:
Intangiblel assetsl derivel theirl valuel froml thel rightsl andl privilegesl grantedl tol thel
companyl usingl them.
Q:l Whichl characteristicl dol intangiblel assetsl possess?
, Answer:
Long-lived
Q:l Howl arel costsl incurredl internallyl tol createl intangiblesl treated?
Answer:
Theyl arel expensedl asl incurred.
Q:l Whatl wouldl marketing-relatedl intangiblesl include?
Answer:
Al tradel name
Q:l Tiburonl Corporationl purchasedl al patentl forl $1,850,000l onl Novemberl 30,l 2018.l Itl
hasl al remainingl legall lifel ofl 18l years.l Tiburonl estimatesl thatl thel remainingl usefull lifel
ofl thel patentl isl 15l years.l Whatl balancel willl bel reportedl onl thel Decemberl 31,l 2020l
balancel sheetl forl thel patentl (ifl necessary,l roundl yourl answerl tol thel nearestl dollar)?
Answer:
$1,593,056
Patentsl arel amortizedl usingl thel straight-linel methodl overl thel shorterl ofl thel usefull lifel
andl thel legall lifel ofl thel asset.l Onl Decemberl 31,l 2020,l thel assetl wouldl bel amortizedl
forl 25l monthsl [1l monthl inl 2018l +l 12l monthsl inl 2019l +l 12l monthsl inl 2020].l
$1,850,000l /l 180l monthsl =l monthlyl amortizationl ofl $10,277.78l xl 25l monthsl =l
$256,944.50l totall amortizationl expense.l Thel bookl valuel atl Decemberl 31,l 2020l isl
$1,593,056l ($1,850,000l -l $256,944.50).
Q:l Whatl isl al federallyl grantedl right?
Answer:
Copyright
