Brief Exercise 9-14 Kwik Taxi Service uses the units of activity method in compu

Question

Brief Exercise 9-14 Kwik Taxi Service uses the units of activity method in computing depreciation on its taxicabs. Each ca is expected to be dir en 1? 000 miles. Ta $22,000 and is expected to have a salvage value of $600. Taxi 10 was driven 30,000 miles in 2016 and 34,300 miles in 2017. tost XYour answer is incorrect. Try again. Determine the depreciation cost. (Round answer to 2 decimal places, e.g. 1.25.) Depreciable cost per unit LINK TO TEXT Your answer is incorrect. Try again. Compute the depreciation for each year. (Round answers to 0 decimal places, e.g. 125.) 2016 2017 Depreciation expense Click if you would like to Show Work for this question: Open Show Work LINK TO TEXT

Explanation / Answer

Depreciable cost/unit=(Cost-Salvage value)/Total useful life

=(22000-600)/161000

=$0.13 per unit

[Please note that intermediate calculations have been rounded off to compute depreciation expense for 2016 and 2017].

2016 2017 Depreciation expense (0.13*30000)=$3900 (0.13*34300)=$4459(Approx).

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