E9.5 (LO 2) Copacabana Bus Lines uses the units-of-activity method in depreciating its buses. One bus waspurchased on January 1, 2020, at a cost of R$145,000. Over its 4-year useful life, the bus is expected to bedriven 100,000 miles. Residual value is expected to be R$15,000.Compute depreciation under units-of-activity method.Instructionsa. Compute the depreciable cost per unit.b. Prepare a depreciation schedule assuming actual mileage was 2020, 27,000; 2021, 32,000; 2022,24,000; and 2023, 17,000.

Depreciation means fall in the value of tangible fixed assets because of its usage or with efflux of…

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Compute depreciation under units-of-activity method. structions a. Compute the depreciable cost per unit. b. Prepare a depreciation schedule assuming actual mileage was 2020, 27,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

E9.5 (LO 2) Copacabana Bus Lines uses the units-of-activity method in depreciating its buses. One bus was
purchased on January 1, 2020, at a cost of R$145,000. Over its 4-year useful life, the bus is expected to be
driven 100,000 miles. Residual value is expected to be R$15,000.
Compute depreciation under units-of-activity method.
Instructions
a. Compute the depreciable cost per unit.
b. Prepare a depreciation schedule assuming actual mileage was 2020, 27,000; 2021, 32,000; 2022,
24,000; and 2023, 17,000.

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