BACK NE Exercise 9-19 Whippet Bus Lines uses the units-of-activity method in dep
ID: 2522295 • Letter: B
Question
BACK NE Exercise 9-19 Whippet Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on Januery 1, 2017, at a cost of $128,000 Over its 4-year useful life, the bus is expected to be driven 218,000 miles. Salvage value is expected to be $8,100. Your answer is incorrect. Try again. Compute the depreciation cost per unit. (Round answer to 3 decimal places, e.g. 6.251) Depreciation cost per unit Your answer is incorrect. Try again. Prepere a depreciation schedule assuming actual mileage wes: 2017, 51,200; 2018, 66,560; 2019, 52,480; and 2020, 34,560. (Round depreciation cost per unit to 3 decimal places, e.g. 0.125 and other answers to O declmal places, e.g. 125) End of Year Years Unitsof Activity× Depreciation cost/uni-Annual Depreciation Expense Accumulated Depreciation Book Value 2017 2018 2019 8 9Explanation / Answer
(a) Depreciation cost per unit = $0.55 per Mile
Depreciation cost per unit = (Cost – Salvage Value) / Actual Miles
= ($128000 - $8100 ) / 218000 Miles
= $ 0.55 per mile
(b) Depreciation Schedule
Year
Units of Activity
Depreciation cost / unit
Annual Depreciation
Accumulated Depreciation
Book Value
2017
51,200.00
$0.55
28,160.00
28,160.00
99,840.00
2018
66,560.00
$0.55
36,608.00
64,768.00
63,232.00
2019
52,480.00
$0.55
28,864.00
93,632.00
34,368.00
2020
34,560.00
$0.55
26,268.00
119,900.00
8,100.00
119,900.00
Year
Units of Activity
Depreciation cost / unit
Annual Depreciation
Accumulated Depreciation
Book Value
2017
51,200.00
$0.55
28,160.00
28,160.00
99,840.00
2018
66,560.00
$0.55
36,608.00
64,768.00
63,232.00
2019
52,480.00
$0.55
28,864.00
93,632.00
34,368.00
2020
34,560.00
$0.55
26,268.00
119,900.00
8,100.00
119,900.00
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