INTERMEDIATE ACCOUNTING II - D104 WGU
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 - CORRECT
-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 - CORRECT -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 - CORRECT -
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 - CORRECT -
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 - CORRECT -Trade Secrets
Pay out ratio - CORRECT -Pay out ratio = cash
dividends/net income (less preferred dividends, if applicable)
Return on common stockholders' equity - CORRECT
-Return on Common Stockholders' Equity = (Net Income -
Preferred Dividends) / Average Common Stockholders' Equity
Book value per share - CORRECT -Book Value per
Share = common stockholders equity/outstanding shares
Dilutive Securities - CORRECT -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 - CORRECT -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
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 - CORRECT
-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 - CORRECT -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 - CORRECT -
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 - CORRECT -
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 - CORRECT -Trade Secrets
Pay out ratio - CORRECT -Pay out ratio = cash
dividends/net income (less preferred dividends, if applicable)
Return on common stockholders' equity - CORRECT
-Return on Common Stockholders' Equity = (Net Income -
Preferred Dividends) / Average Common Stockholders' Equity
Book value per share - CORRECT -Book Value per
Share = common stockholders equity/outstanding shares
Dilutive Securities - CORRECT -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 - CORRECT -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
