Exam (elaborations)
INTERMEDIATE ACCOUNTING D104 QUESTIONS AND ANSWERS WITH SOLUTIONS 2024
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INTERMEDIATE ACCOUNTING D104 QUESTIONS AND ANSWERS WITH SOLUTIONS 2024
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INTERMEDIATE ACCOUNTING D104QUESTIONS AND ANSWERS WITH
SOLUTIONS 2024
Depreciable Base - ANSWER cost - salvage value
activity method of depreciation - ANSWER (cost less salvage) x hours this year/ total estimated hours
straight line depreciation - ANSWER (cost - salvage value) / useful life
impairment - ANSWER - a permanent decline in the fair value of an asset
- =carrying amount - fair value
- carrying amount > future cash flows, impairment exists
- carrying amount > fair value, impairment exists
- Book value - fair value (impairment exists when book value is greater
depletion cost per unit - ANSWER (total cost - salvage value) / total estimated units available
asset turnover - ANSWER net sales/average total assets
Profit Margin on Sales - ANSWER net income/net sales
return on assets - ANSWER net income/average total assets
Current Ratio - ANSWER current assets/current liabilities
acid test ratio - ANSWER Cash, current investments, and accounts receivable divided by current
liabilities; measures the availability of liquid current assets to pay current liabilities
effective interest method - ANSWER The preferred procedure for computing the amortization of a
discount or premium. Under this method, companies compute bond interest expense (revenue) at the
beginning of the period by the effective-interest rate and then subtract bond interest paid (calculated as
the face amount of the bonds times the stated interest rate); the result is the amortization amount.
debt to assets ratio - ANSWER total liabilities/total assets
Times Interest Earned - ANSWER (Net Income + Interest Expense + Income Tax Expense) / Interest
Expense
Return on common stockholders' equity - ANSWER (net income - preferred dividends) / average common
stockholders' equity
book value per share - ANSWER Total stockholders' equity / Number of common shares outstanding
earnings per share - ANSWER net income or profit divided by the number of stock shares outstanding
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