In recent years, Culver Transportation purchased three used buses. Because of frequent turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each bus, and various methods have been used. Information concerning the buses is summarized in the table below. Bus 1 2 3 Acquired Jan. 1, 2020 Jan. 1, 2020 Jan. 1, 2021 Cost $98,900 120,000 90,800 Salvage Value $5,000 11,500 7,500 Useful Life in Years 5 5 4 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 119,000. Actual miles of use in the first 3 years were 2021, 26,500; 2022, 32,000; and 2023, 29,000.

In recent years, Culver Transportation purchased three used buses. Because of frequent turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each bus, and various methods have been used. Information concerning the buses is summarized in the table below. Bus 1 2 3 Acquired Jan. 1, 2020 Jan. 1, 2020 Jan. 1, 2021 Cost $98,900 120,000 90,800 Salvage Value $5,000 11,500 7,500 Useful Life in Years 5 5 4 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 119,000. Actual miles of use in the first 3 years were 2021, 26,500; 2022, 32,000; and 2023, 29,000.

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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