WGU PA Accounting II exam review
questions and answers
Which inventory method results in the lowest cost of goods sold and highest net
income in a period of rising prices? - First in, first out
A seller of recreational vehicles (RVs) wants to keep track of the actual cost of
each item sold.
Which inventory costing method should this business use to meet this goal? -
Specific identification
$10,989
(50x$105 + 100x$108 + 100x$110 + 200x$112)/450 x (50 + 100 + 100 + 200 - 350)
- $10,989
(50*$105 + 100*$108 + 100*$110 + 200*$112)/450 * (50 + 100 + 100 + 200 - 350)
A company sells baseball bats. The following record shows the inventory activity
for the month of October:
,WGU PA Accounting II exam review
questions and answers
Number of Bats/Unit Cost)
Oct 1 (beginning inventory) (50/$105)
Purchases:
Oct 12 (100/$108)
Oct 20 (100/$110)
Oct 25 (200/$112)
October Sales 350
Using the first in, first out method, what is the value of the inventory on October
31 (rounded to the nearest dollar)? - $11,200
$112 * (50 + 100 + 100 + 200 - 350)
What is the normal method of amortizing a patent? - Straight line
In July 2013, a company purchased a mine at a cost of $18,000,000. The mine has
an estimated life of ten years with no estimated salvage value.
, WGU PA Accounting II exam review
questions and answers
The mine is estimated to contain 500,000 tons of ore. During 2013, 120,000 tons
of ore were extracted and sold.
What is the depletion expense in year 2013? - $4,320,000
120,000/500,000 * $18,000,000
A machine was purchased for $95,000. Freight charges amounted to $6,200 and
there was a cost of $33,000 for building a foundation and mounting the machine.
It is estimated that the machine will have a $25,000 salvage value at the end of its
five-year useful life.
What will the depreciation expense be each year using the straight-line method? -
$21,840
($95,000 + $6,200 + $33,000 - $25,000)/5
The beginning book value on a piece of machinery was reported at $5,000. The
machine has an overall useful life of four years and no estimated salvage value.
questions and answers
Which inventory method results in the lowest cost of goods sold and highest net
income in a period of rising prices? - First in, first out
A seller of recreational vehicles (RVs) wants to keep track of the actual cost of
each item sold.
Which inventory costing method should this business use to meet this goal? -
Specific identification
$10,989
(50x$105 + 100x$108 + 100x$110 + 200x$112)/450 x (50 + 100 + 100 + 200 - 350)
- $10,989
(50*$105 + 100*$108 + 100*$110 + 200*$112)/450 * (50 + 100 + 100 + 200 - 350)
A company sells baseball bats. The following record shows the inventory activity
for the month of October:
,WGU PA Accounting II exam review
questions and answers
Number of Bats/Unit Cost)
Oct 1 (beginning inventory) (50/$105)
Purchases:
Oct 12 (100/$108)
Oct 20 (100/$110)
Oct 25 (200/$112)
October Sales 350
Using the first in, first out method, what is the value of the inventory on October
31 (rounded to the nearest dollar)? - $11,200
$112 * (50 + 100 + 100 + 200 - 350)
What is the normal method of amortizing a patent? - Straight line
In July 2013, a company purchased a mine at a cost of $18,000,000. The mine has
an estimated life of ten years with no estimated salvage value.
, WGU PA Accounting II exam review
questions and answers
The mine is estimated to contain 500,000 tons of ore. During 2013, 120,000 tons
of ore were extracted and sold.
What is the depletion expense in year 2013? - $4,320,000
120,000/500,000 * $18,000,000
A machine was purchased for $95,000. Freight charges amounted to $6,200 and
there was a cost of $33,000 for building a foundation and mounting the machine.
It is estimated that the machine will have a $25,000 salvage value at the end of its
five-year useful life.
What will the depreciation expense be each year using the straight-line method? -
$21,840
($95,000 + $6,200 + $33,000 - $25,000)/5
The beginning book value on a piece of machinery was reported at $5,000. The
machine has an overall useful life of four years and no estimated salvage value.
