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 $129,000. Over its 4-year useful life, the bus is expected to be driven 216,250 miles. Salvage value is expected to be $7,900 Compute the depreciation cost per unit. (Round answer to 3 decimal places, e.g. 6.251) Depreciation cost per unit s LINK TO TEXT VIDEO: APPLIED SKILLS Prepare a depreciation schedule assuming actual mileage was: 2017, 51,600; 2018, 67,080; 2019, 52,890; and 2020, 34,830. (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 2017 2018 2019 2020 Units of Activity Depreciation Cost/unit-Annual Depreciation Expense Accumulated Depreciation Book Value LINK TO TEXT VIDEO: APPLIED SKILLS

Explanation / Answer

Depreciation cost per unit=(129000-7900)/216250= $0.56 Year Units of activity Depreciation cost/unit Annual depreciation expense Accumulated depreciation Book value 2017 51600 0.56 28896 28896 100104 2018 67080 0.56 37565 66461 62539 2019 52890 0.56 29618 96079 32921 2020 34830 0.56 19505 115584 13416

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