Question

..10 DICINTUJ UL elle puuell Lumener vius. Si no tiene que editarlo, es mejor que siga en Vi A10 x & for A B 1 N E10-5 Yello Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2017, at a cost of $148,000. Over its 4-year useful life, the bus is expected to be driven 100,000 3 miles. Salvage value is expected to be $8,000. 4 5 6 Instructions 7 (a) Compute the depreciable cost per unit. (b) Prepare a depreciation schedule assuming actual mileage was: 2017, 26,000; 2018, 32,000; 2019, 25,000; 8 and 2020, 17,000. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

Answer 1

Solution: 1. Computation of depreciation expense permile: Cost of bus purchased on Jan 15 2017 = $ 1,48,000 Salvage value = $ 8,000 Useful life = 4 years Useful life in miles = 1,00,000 miles Depreciation expense per mile = (Cost of Bus-Salvage value / Useful life in miles Depreciation expense per mile = $1,48,000 - $ 8000) /1,00,000 miles = $ 1.40 Depreciation expense per mile

2. Computation of depreciation schedule: Year Miles driven (A) Depreciation expense per mile (B) $ 1.40 2017 26,000 miles 2018 32,000 miles $ 1.40 Total depreciation expense for the year C = (A) *(B) $36,400 (26,000 miles *$ 1.40) $ 44,800 (32,000 miles *$ 1.40) $ 35,000 (25,000 miles *$ 1.40) $ 23,800 (17,000 miles *$ 1.40) 2019 25,000 miles $ 1.40 2020 17,000 miles $ 1.40

Thankyou !!!!