In recent years, Avery Transportation purchased three used buses. Because of frequent turnover in the accounting department, a different accountant selected the depreciation method for each bus, and various methods were selected. Information concerning the buses is shown as follows. Salvage Useful Life Depreciation Method Bus Acquired Cost Value in Years Straight-line Declining-balance Units-of-activity $ 96,000 $ 6,000 1/1/17 1/1/17 4 110,000 10.000 3 1/1/18 92,000 8,000 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 2018, 24,000; 2019, 34,000; and 2020, 30,000. For Bus #3, calculate depreciable cost per mile under units-of-activity method. (Round answer to 2 decimal places, e.g. 0.50.) Depreciable cost $ per mile Compute the amount of accumulated depreciation on each bus at December 31, 2019. (Round depreciable cost per unit to 2 decimal places, e.g. O.50 and depreciation rate to O decimal places, e.g. 15%. Round final answers to O decimal places, e.g. 2,125.) Accumulated depreciation BUS 1 $ BUS 2 $ BUS 3 $ eTextbook and Media If Bus 2 was purchased on April 1 instead of January 1, what is the depreciation expense for this bus in (1) 2017 and (2) 2018? (Round answers to 0 decimal places, e.g. 2,125.) (1) (2) 2017 2018 Depreciation expense eTextbook and Media
In recent years, Avery Transportation purchased three used buses. Because of frequent turnover in the accounting department, a different accountant selected the depreciation method for each bus, and various methods were selected. Information concerning the buses is shown as follows. Salvage Useful Life Depreciation Method Bus Acquired Cost Value in Years Straight-line Declining-balance Units-of-activity $ 96,000 $ 6,000 1/1/17 1/1/17 4 110,000 10.000 3 1/1/18 92,000 8,000 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 2018, 24,000; 2019, 34,000; and 2020, 30,000. For Bus #3, calculate depreciable cost per mile under units-of-activity method. (Round answer to 2 decimal places, e.g. 0.50.) Depreciable cost $ per mile Compute the amount of accumulated depreciation on each bus at December 31, 2019. (Round depreciable cost per unit to 2 decimal places, e.g. O.50 and depreciation rate to O decimal places, e.g. 15%. Round final answers to O decimal places, e.g. 2,125.) Accumulated depreciation BUS 1 $ BUS 2 $ BUS 3 $ eTextbook and Media If Bus 2 was purchased on April 1 instead of January 1, what is the depreciation expense for this bus in (1) 2017 and (2) 2018? (Round answers to 0 decimal places, e.g. 2,125.) (1) (2) 2017 2018 Depreciation expense eTextbook and Media
Chapter8: Depreciation And Sale Of Business Property
Section: Chapter Questions
Problem 6MCQ: Which of the following is not true about the MACRS depreciation system: A salvage value must be...
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Question
In recent years, Avery Transportation purchased three used buses. Because of frequent turnover in the accounting department, a different accountant selected the depreciation method for each bus, and various methods were selected. Information concerning the buses is shown as follows.
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 2018, 24,000; 2019, 34,000; and 2020, 30,000.
|
Bus
|
Acquired
|
Cost
|
Salvage
Value |
Useful Life
in Years |
Depreciation
Method |
|||||
| 1 | 1/1/17 | $ 96,000 | $ 6,000 | 5 | Straight-line | |||||
| 2 | 1/1/17 | 110,000 | 10,000 | 4 | Declining-balance | |||||
| 3 | 1/1/18 | 92,000 | 8,000 | 5 | 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 2018, 24,000; 2019, 34,000; and 2020, 30,000.
For Bus #3, calculate depreciable cost per mile under units-of-activity method. (Round answer to 2 decimal places, e.g. 0.50.)
| Depreciable cost | $ | per mil |
Transcribed Image Text:In recent years, Avery Transportation purchased three used buses. Because of frequent turnover in the accounting department, a different accountant
selected the depreciation method for each bus, and various methods were selected. Information concerning the buses is shown as follows.
Salvage Useful Life
Depreciation
Method
Bus Acquired
Cost
Value
in Years
Straight-line
Declining-balance
Units-of-activity
$ 96,000 $ 6,000
1/1/17
1/1/17
4
110,000
10.000
3
1/1/18
92,000
8,000
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 2018, 24,000; 2019, 34,000; and 2020, 30,000.
For Bus #3, calculate depreciable cost per mile under units-of-activity method. (Round answer to 2 decimal places, e.g. 0.50.)
Depreciable cost $
per mile
Transcribed Image Text:Compute the amount of accumulated depreciation on each bus at December 31, 2019. (Round depreciable cost per unit to 2 decimal places, e.g. O.50 and
depreciation rate to O decimal places, e.g. 15%. Round final answers to O decimal places, e.g. 2,125.)
Accumulated depreciation
BUS 1 $
BUS 2 $
BUS 3 $
eTextbook and Media
If Bus 2 was purchased on April 1 instead of January 1, what is the depreciation expense for this bus in (1) 2017 and (2) 2018? (Round answers to 0 decimal
places, e.g. 2,125.)
(1)
(2)
2017
2018
Depreciation expense
eTextbook and Media
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