Problem 9-2A (Part Level Submission) In recent years, Avery Transportation purch

Question

Problem 9-2A (Part Level Submission) 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 summarized as follows Useful Life in Years Salvage Depreciation Bus Acquired Cost 95,000 110,000 73,500 Value Method s5,000 10,000 7,500 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 110,000. Actual miles of use in the first 3 years were 2016, 23,000; 2017, 31,000; and 2018, 29,000 (a1) (b) x Your answer is incorrect. Try again If Bus 2 was purchased on April 1 instead of January 1, what is the depreciation expense for this bus in (1) 2015 and (2) 2016? (Round answers to 0 decimal places, e.g. 2,125.) 2015 2016 Depreciation expense

Explanation / Answer

Straight line rate = 100/4 = 25%

Double decline rate = 25*2=50%

2015 Depreciation = 110000*50%*9/12 = 41250

2016 Depreciation = (110000*50%*3/12)+(110000*50%*50%*9/12) = 34375

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