Question

Cube Ice Company received a 120-day, 10% note for $36,000, dated April 9 from a customer on account. Assume 360 days in a yea
Straight-Line Depreciation A building acquired at the beginning of the year at a cost of $140,400 has an estimated residual v
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  • [1]

--Part B

Maturity value = Face value + Interest
= $ 36000 + (36000 x 10% x 120/360)
= 36000 + 1200
= $ 37,200

  • [2]

Part a: Depreciable cost = $ 140400 cost - $ 5400 salvage value = $ 135000

Part b = Straight line rate = [($135000 / 10 years) / 135000] = 10%

Part c = Annual Straight line depreciation = $ 135000 x 10% = $ 13500

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