HINTER VERS?ON .BACKE Exercise 9-19 Bus Lines uses the units-of-activity method

Question

HINTER VERS?ON .BACKE Exercise 9-19 Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2017, at a cost of $131,000. Over its 4-year useful life, the bus is expected to be driven 240,000 milles. Salvage value is expected to be $7,400. Your answer is incorrect. Try again. Compute the depreciation cost per unit. (Round answer to 3 declmal places, e.g. 6.251 Depreciation cost per unit 52 VIDEO APPLIED SKILS ® Your answer is incorrect. Try again. places, o.g. o.125 and other answers to 0 decimai places, ep. 325) Years Units of ActivityDepreciation Cost/Unit Annual Depreclation Expense Accumulated Depreciation tion schedule assuming actual mileage was: 2017, 52.400, 2018,60,120, 2019, 53,10, and 2020,35,370 (Round depreciation cost per unit to3 dca 2017, 52.400, 2018, 68,120) 2019, 53,710, and 2020, 35,30 Computation End of Year Book Value 2017 14032 72 4032.7 26986 2018 2019 2020 LINK TO TEXT

Explanation / Answer

Depreciation per unit = (131000-7400)/240000 = 0.515 per mile

Depreciation schedule :

Computation End of year Years Units of activity * Depreciation cost per unit = Annual depreciation expense Accumlated depreciation Book value 2017 52400 * 0.515 = 26986 26986 104014 2018 68120 * 0.515 = 35082 62068 68932 2019 53710 * 0.515 = 27661 89729 41271 2020 35370 * = 33871 123600 7400

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