Question

In recent years, Bramble Transportstion purchased three used buses. Because of frequent turnover in the accounting department, a different accountant selected the depreciation method for each bus, and various methods were selected. Information concerning the buses is shown as follows [refer to photo attached].

For the declining-balance method, the company uses the double-declining rate. For the units-of-activity method, total miles are expected to be 112,000. Actual miles of use in the first 3 years were 2019, 27,500; 2020, 33,000; and 2022, 30,500.

Compute the amount of accumulated depreciation on each bus at December 31, 2020.

Problem 9-02A al-a2, b (Video) (Part Level Submission) In recent years, Bramble Transportation purchased three used buses. Because of frequent turnover in the accounting department, a different accountant selected the depreciation method for each bus, and various methods were selected. Information concerning the buses is shown as follows. Salvage Value Depreciation Method Useful Life in Years Acquired Cost Bus Straight-line 1/1/18 $8,000 1 $97,600 2 1/1/18 114,000 11,000 Declining-balance 1/1/19 76,200 Units-of-activity 3 9,000 4 For the declining-balance method, the company uses the double-declining rate. For the units-of-activity method, total miles are expected to be 112,000. Actual miles of use in the first 3 years were 2019, 27,500; 2020, 33,000; and 2021, 30,500 (a1) (a2) Your answer is incorrect. Try again. Compute the amount of accumulated depreciation on each bus at December 31, 2020. (Round depreciation cost per unit to 2 decimal places, e.g. 0.50 and depreciation rate to 0 decimal places, e.g. 15 %. Round final answers to 0 decimal places, e.g. 2,125.) Accumulated depreciation 17,920 BUS 1 41,200 BUS 2 BUS 3 16,500

*Transportation, typographical error

Answer 1

Question requires Accumulated Depreciation means( Total depreciation on dated 31st Dec.2020 from the date of acquisition) however you showed single year depreciation.

Computation of Accumulated Depreciation of Bus 1 under straight line method -

Straight line Depreciation per year = (Cost of Bus 1 - Salvage Value)/useful life of bus 1

= (97600 - 8000)/5

= 89600/5

= 17920

Accumulated Depreciation for three year = 17920*3

= 53760

Computation of Accumulated Depreciation of Bus 2 under Double Declining balance method -

Double Declining Depreciation rate = straight line depreciation rate * 2

= 20*2

= 40%

Chart of Depreciation upto 31st Dec. 2020 -

Date	opening	x	Depreciation Rate	Depreciation	-	Closing Balance
12/31/2018	114000.00	x	40%	45600.00	-	68400.00
12/31/2019	68400.00	x	40%	27360.00	-	41040.00
12/31/2020	41040.00	x	40%	16416.00	-	24624.00
12/31/2021	24624.00	x	40%	9849.60	-	14774.40
12/31/2022	14774.40	x	40%	3774.40	-	11000.00

Accumulated Depreciation upto 31st Dec. 2020 = 45600(Dep. of 2018) + 27360(Dep. of 2019) +16416 (Dep. of 2020)

= 89376

Computation of Accumulated Depreciation of Bus 3 under Units of Digits Method -

Dep. Under Units of Activity method = (Cost of Bus 3 - Salvage Value)*Actual Activity performed during the year/Total estimated lifetime activity of Bus 3

For year ended 31st Dec. 2019

Depreciation = (76200 - 9000)*27500/112000

= 67200*27500/112000

= 16500

For year ended 31st Dec. 2019

Depreciation = (76200-9000)*33000/112000

= 67200*33000/112000

= 19800

Accumulated Depreciation st 31st Dec. = 16500+19800

= 36300

Please check with your answer and let me know.