Question

Return to Blackboard eyPLUS Weygandt, Accounting Principles, 13e CARCERATO PRINTER VERSION ILACK NEXT NT s line Graded nment Bus Useful Life in Years 1 Acquired 1/1/18 1/1/18 1/1/19 Cost $ 96,100 119,000 95.000 Salvage Value $7,000 11,000 7,500 Depreciation Method Straight-line Declining balance Units-of-activity 2 5 5 3 13 For the declining-balance method, the company uses the double-declining rate. For the units of activity method, total miles are expected to be 125,000 Actual miles of use in the first 3 years were 2019, 25,500; 2020, 34,500; and 2021, 30,000 core cesults by iective (1) Your answer is correct For Bus +3, calculate depreciation expense per mile under units-of-activity method. (Round answer to 2 decimal places, a.9.0.50.) Depreciation expense per mile SHOW SOLUTION SHOW ANSWER LINK Attempts: 1 of 4 used Your answer is partially correct. Try again. Compute the amount of accumulated depreciation on each bus at December 31, 2020. (Round answers to decimal places, .. 2.125.) Type here to search e 10:43 PM 7/25/2020 Home End

Answer 1

1 SLM Method (Same depreciation for every year) Cost of bus $ 96,100 Less Salvage Value $ (7,000) Depreciable cost $ 89,100 Useful years 4 Depreciation for 2020 ta 22,275

2 Double Declining method Cost of bus 119,000 $ $ Less Salvage Value (11,000) Depreciable cost $ 108,000 Useful years 5 Depreciation rate 2 x (1 / useful life ) X 100 = 2 X(1/5) X 100 = = 40% Depreciation for 2019. = $ 43,200 Book value on 2020 $ 64,800 Depreciation for 2020 25,920

3 Units Activity Method Cost of bus $ 95,000 Less Salvage Value $ (7,500) Depreciable cost $ 87,500 Expected Miles 125,000 Depreciation cost per mile $0.70 Number of miles in 2020 34,500 Depreciation for 2020 $ 24,150