On January 26, Vibrant Co. borrowed cash from Conrad Bank by issuing a 90-day note with a
Question:
On January 26, Vibrant Co. borrowed cash from Conrad Bank by issuing a 90-day note with a face amount of $70,800. Assume a 360-day year.
1. What is the proceeds of the note, assuming the note carries an interest rate of 7%?
2. What is the procees of the note, assuming the note is discounted at 7%?
QUESTION TWO
Determining Cost of Land
On-Time Delivery Company aquired an adjacent lot to construct a new warehouse, paying $34,000 in cash and giving a short-term note for $250,000. Legal fees paid were $1,520, delinquent taxes assumed were $9,300, and fees paid to remove an old building from the land were $20,100. MAterials salvaged from the demolition of the building were sold for $4,000. A contractor was paid $863,400 to construct a new warehouse.
1. What is the cost of the land to be reported on the balance sheet?
QUESTION THREE
Double-Declining-Balance Depreciation
A Building acquired at the beginning of the year at a cost of $68,800 has an estimated residual value of $2,100 and an estimated useful life of four years.
1. What is the double-declining-balance rate ? % = ?
2. What is the Double-declining-balance depreciation for the first year? $ = ?
QUESTION FOUR
Units-of-activity Depreciation
A truck acquired a cost of $595,000 has an estimated residual value of $33,900, has an estimated useful life of 62,000 miles, and was driven 4,300 miles during the year.
1. What is the Depreciable cost? $ = ?
2. What is the Depreciation rate? $ = ? per mile
3. What is the Units-of-activity Depreciation for the year? $ = ?
Corporate Financial Accounting
ISBN: 978-1133952411
12th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac