P10-2A In recent years, Juresic Transportation purchased three used buses. Becau
ID: 2428097 • Letter: P
Question
P10-2AIn recent years, Juresic 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.
Bus Acquired Cost Salvage
Value Useful Life
in Years Depreciation Method
1 1/1/08 $96,000 $6,000 5 Straight-line
2 1/1/08 120,000 10,000 4 Declining-balance
3 1/1/09 80,000 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: 2009, 24,000; 2010, 34,000; and 2011, 30,000.
Explanation / Answer
Year
Depreciation
charged 50%
remainig value
1
110000
55000
55000
2
55000
27500
27500
3
27500
13750
13750
4
13750
6875
6875
Year
Miles driven
Per mile
Depreciation
2009
24000
0.6
14400
2010
34000
0.6
20400
2011
30000
0.6
18000
Year
Depreciation
charged 50%
remainig value
1
110000
55000
55000
2
55000
27500
27500
3
27500
13750
13750
4
13750
6875
6875
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