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WGU D366 SECTION 2 2024/2025 WITH 100% ACCURATE SOLUTIONS
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WGU D366 SECTION 2 2024/2025 WITH 100% ACCURATE SOLUTIONS
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WGU D366 SECTION 2 2024/2025 WITH100% ACCURATE SOLUTIONS
What constitutes representational fairness of financial information? -
Precise Answer ✔✔An error-free accounts receivable balance
What is one challenge in valuing assets and liabilities under the mixed
attribute measurement model? - Precise Answer ✔✔Deciding on the
proper valuation method of certain assets and liabilities
Valuation methods include historical, fair value, and mixes of the two.
Each method will give different results, affecting both the balance sheet
and income statement.
A company purchased a truck with a list price of $200,000 subject to a
5% discount if paid within 30 days. The company paid within 30 days,
so it received the discount. It paid $3,000 to obtain the title to the truck
and a $700 license fee for the first year of operation. It paid $1,000 to
paint the firm's name on the truck and $2,000 for property and liability
insurance for the first year of operation.
What is the acquisition cost of this truck that the company should record
in its accounting records? - Precise Answer ✔✔$194,000
An aircraft manufacturer sold a plane to an airline on January 1, 2020.
The sales agreement required the airline to pay $1 million immediately
and $1 million on December 31 of each year for 20 years, beginning on
,December 31, 2020. The aircraft manufacturer and airline agree that 7%
is an appropriate interest rate for this arrangement.
What is the present value of the receivable on the aircraft manufacturer's
books on January 1, 2020, immediately after receiving the $1 million
down payment? - Precise Answer ✔✔$10,594,014
A company purchased land, prepared it for use, and constructed a
building on it. The costs were as follows:
Purchase price of the land$250,000Commission paid to real estate
agent$10,000Rezoning permit fee$7,500Cost of razing and removing
existing building$25,000Cash received for scraps of old building
materials$7,000Construction cost of new building$500,000Cost of
landscaping the property$28,000Cost of property taxes for first year of
occupation$15,000
What should the company record as the cost of the land on the balance
sheet? - Precise Answer ✔✔$285,500
Which of these would be recorded on a company's balance sheet as an
asset? - Precise Answer ✔✔An increase in the value of stocks of another
company held as an investment
What represents an exchange of economic value in terms of revenue
recognition? - Precise Answer ✔✔Comprehensive income is realized in
a market transaction
Two friends contribute $40,000 each to form a new business. The
owners use this amount to purchase a piece of equipment for $80,000
cash. They estimated that the useful life of the equipment is five years,
, and the salvage value is $15,000. They rent out the equipment to a
customer for an annual rental of $20,000 per year for five years. Annual
cash operating costs for insurance, taxes, and the other items total
$5,000 annually. At the end of the fifth year, the owners sell the
equipment for $18,000 instead of the original estimated $15,000 salvage
value.
What is the total net income for the five-year period? - Precise Answer
✔✔$13,000
Two friends contribute $40,000 each to form a new business. The
owners use the contriubtions to purchase a piece of equipment for
$80,000 cash. They estimate that the useful life of the equipment is five
years, and the salvage value is $15,000. They rent out the equipment to a
customer for an annual rental of $20,000 per year for five years. Annual
cash operating costs for insurance, taxes, and other items totals $5,000
annually. At the end of the fifth year, the owners sell the equipment for
$18,000 instead of the $15,000 salvage value initially estimated.
What is the total amount of cash flows for the five-year period? - Precise
Answer ✔✔$93,000
Total cash flows for the five-year period is calculated as:Contributions
by owners - Purchase of equipment + (Annual rent revenue x 5) -
(Annual operating expenses x 5) + Sale of equipment= $80,000 -
$80,000 + ($20,000 x 5) - ($5,000 x 5) + $18,000= $80,000 - $80,000 +
$100,000 - $25,000 + $18,000= $93,000
A company purchases a tract of land on January 1, 2018. The following
information summarizes the changes in value:
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