Exercise 9-19 Whippet Bus Lines uses the units-of-activity method in depreciatin

Question

Exercise 9-19 Whippet Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2017, at a cost of $127,000. Over ts 4-year useful life, the bus is expected to be driven 216,000 miles Salvage value is expected to be $8,200 Compute the depreciation cost per unit. (Round answer to 3 decimal places, e.g.6.251) Depreciation cost per unit LINK TO TEXT VIDEO APPLIED SKILLS Prepare a depreciation schedule assuming actual mileage was: 2017, 50,800; 2018, 66,040; 2019, 52,070; and 2020, 34,290. (Round depreciation cost per unit to 3 decimal places, e.g. 0.125 and other answers to o decimal places, e.g. 125) Computation End of Year Years Units of Activity x Depreciation Cost/Unit-Annual Depreciation Expense Accumulated Depreciation Book Value 2017 2018 2019 LINK TO TEXT VIDEO APPLIED SKILLS

Explanation / Answer

Depreciation cost per unit = (127000-8200)/216000= $0.55 Years Units of activity Depreciation cost per unit Annual depreciation Accumulated depreciation Book value 2017 50800 0.55 27940 27940 99060 2018 66040 0.55 36322 64262 62738 2019 52070 0.55 28639 92901 34099 2020 34290 0.55 25899 118800 8200

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