Question

Please answer the short answer questions.

SHORT ANSWERS 'what is the amount ofinterest accrued on $5,000 at 6% for 90 dys? uine orcthe year, Martin Mason Inc parchased a used jet for $28,000,000. The company expects the plane is nownear (k000,000 miles) and to have a residual value of S6,200,000. In the first year, the uing the Units-of proastie r amount of the eompary's first-year depreciation expense on the plane jet to remain f production method for depreciation? nod 3. Refer to the question above What is the total amount of depreciation expense Martin Mason Inc. using the following methods? will record for the jet over its entire useful life - Straight-line? h. Units-of-production? Information for question 4. Cube $420,000 Silver Octagon Inc. S310,000 Cost of Goods Sold Inventory Turnover 56.5 6.5 5.4 67.1 Days inventory . Which company is more likely having trouble selling its inventory White Cube Co. or Silver Octagon Inc.? Answer in one or two complete sentences, skating the Compay name and referring to a ratio to support your answer. Note: No calculations are required The ratio values have been provided

Answer 1

Answer 1.

Interest Accrued = Principal * Interest Rate * Period
Interest Accrued = $5,000 * 6% * 90/360
Interest Accrued = $75

Answer 2.

Cost of Jet = $28,000,000
Salvage Value = $6,200,000
Useful Life = 8,000,000 miles

Depreciable Cost = Cost of Jet - Salvage Value
Depreciable Cost = $28,000,000 - $6,200,000
Depreciable Cost = $21,800,000

Depreciation per mile = Depreciable Cost / Useful Life
Depreciation per mile = $21,800,000 / 8,000,000
Depreciation per mile = $2.725

Depreciation Expense for 1^st Year = Depreciation per mile * Miles flown during 1^st Year
Depreciation Expense for 1^st Year = $2.725 * 1,100,000
Depreciation Expense for 1^st Year = $2,997,500

Answer 3.

Depreciation over entire useful life will be equal to the depreciable cost of jet. So, Depreciation over entire useful life will be $21,800,000