Question

Compute depreciation under different methods. (LO2) P10-2A In recent years, Avery Transportation purchased three used buses. Because of frequent turnover in the accounting department, a different accountant selected the depre- ciation method for each bus, and various methods were selected. Information concerning the buses is summarized as follows. Bus Acquired 1/1/15 2 1/1/15 1/1/16 Cost $ 96,000 110,000 92,000 Salvage Useful Life Value in Years $ 6,000 10,000 4 8,000 Depreciation Method Straight-line Declining-balance Units-of-activity For the declining balance method, the company uses the double-declining rate. For the units-of-activity method, total miles are expected to be 120.000. Actual miles of use in the first 3 years were 2016, 24,000; 2017, 34,000; and 2018, 30,000. Instructions (a) Compute the amount of accumulated depreciation on each bus at December 31, 2017 (b) If Bus 2 was purchased on April 1 instead of January 1, what is the depreciation expense for this bus in (1) 2015 and (2) 2016? (a) Bus 2, 2016, 582,500

Answer 1

Ansullore comperte- the amount d accumula led depreciation on fach bus :- @ busi e (26 400 - 6000_Jx3 ' = 90,000_x3 90,000 - -X3 18000 x3 = 54,000 libus = 54,000 bus a straight tinc verte = L=0.25-25% 4 Double Declinc rate = 25%. x2 = 507. 8oLS NP = 18 ,00 3 Số 1 = 55,000 do16 dep = 55,000 X 504. = 27,500 Rolf dut. 27,500 50 1. = 13750

accumulated dep on Dec 31, 2017 = 55,000+24,500+13750 = 96250 ibus 2 = 96250 buis 3 - 92,000 - 8000 120,000 84,000 120,000 = oifpor miles. 1. . 'n bees 3 = 067 poimides ! b. Depreciation expense;- Tij 2015 Expenses = 110,000 504 x(9/12) = 41250 [wars expense = 41950) 9) 8016 Expenses = (116,000x507xflia))+(55000X501-X(212) 13750 + 220625 234375 1.2016 Expense = 34345