Question

* Practice Assignment debook ORION Downloadable Textbook ssignment FULL SCREEN PRINTER VERSION BACK NEXT Question Rosco Taxi Service uses the units-of-activity method in computing depreciation on its taxicabs. Each cab is expected to be driven 142.000 miles. Taxi no. 10 cost $37,000 and is expected to have a salvage value of $740. Taxi no. 10 is driven 29.400 miles in year 1 and 20,700 miles in year 2. BE Calculate depreciation cost per mile using unit-of-activity method. (Round answer to 2 decimal places, .g. 0.50.) Depreciation cost s per miles NH helle Compute the depreciation for each year. (Round answers to a decimal 9 1 Year 2 Depreciation Depreciation s ALES By accessing this Question Assistance, you will leam while you earn points based on the Point Potential Policy set by your instructor. Question Attempts: 0 of 1 used SAVE FOR LATER SUBMIT ANSWER PETER o Earn Maximum Points available only if you answer this question correctly in your first E mm 5 Version 4.24.16.2 of John Wiley & Sons, Inc. ivacy Policy. I © 2000-2019 John

Answer 1

SOLUTION :
	CALCULATION OF THE DEPRECIATION AS PER UNITS OF ACTIVITY METHOD
	Purchase Cost of Taxi		$                  37,000
	Less: Salvage Value =		$                        740
	Net Value for Depreciation =		$                  36,260
	Expected to run number of Miles		$               1,42,000	Miles
	Depreciation per Miles		$                       0.26	Per Miles
	($ 36,260 / 142,000 Miles)
		No. of Miles Run	"X'	Depreciation per Miles	=	Depreciation
	Depreciation of year 1 =	29,400	"X'	$                  0.26		$                    7,644
	Depreciation of year 2 =	20,700	"X'	$                  0.26		$                    5,382
	Answer =	Year 1	Year 2
	Depreciation Expenses	$                        7,644	$                     5,382