In recent years, Avery Transportation purchased three used buses. Because of fre

Question

In recent years, Avery 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 summarized as follows.

Bus

Acquired

Cost

Salvage
Value

Useful Life
in Years

Depreciation
Method

A.For Bus #3, calculate depreciation expense per mile under units-of-activity method. (round to 2 decimal places)

B. Compute the amount of accumulated depreciation on each bus at December 31, 2014. (round to 2 decimal places)

C. If bus 2 was purchased on April 1 instead of January 1, what is the depreciation expense for this bus in 2012 and 2013?( round to 2 decimal places)

Bus

Acquired

Cost

Salvage
Value

Useful Life
in Years

Depreciation
Method

1 1/1/12 $ 96,400 $ 6,400 5 Straight-line 2 1/1/12 112,000 10,100 5 Declining-balance 3 1/1/13 80,580 7,500 5 Units-of-activity

Explanation / Answer

A)

B)

C)

Bus # 3 Year Cost Salavage Value Actual Miles Depreciation 2013                     80,580        7,500 27200           16,320.00 2014 32100           19,260.00 2015 31200           18,720.00

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