Brief Exercise 9-14 (Part Level Submission) Kwik Taxi Service uses the units-of-

Question

Brief Exercise 9-14 (Part Level Submission) Kwik Taxi Service uses the units-of-activity method in computing depreciation on its taxicabs. Each cab is expected to be driven 140,000 miles. Taxi 10 cost $27,800 and is expected to have a salvage value of $300. Taxi 10 was driven 28,000 miles in 2016 and 33,600 miles in 2017. (a) Your answer is correct. Determine the depreciation cost. (Round answer to 2 decimal places, e.g. 1.25.) Depreciable cost per unit SHOW SOLUTION LINK TO TEXT Attempts: 1 of 10 used (b) Compute the depreciation for each year. (Round answers to 0 decimal places, e.g. 125.) 2016 2017 Depreciation expense

Explanation / Answer

(a) Depriciable Cost Per Unit =Depreciable Base / Useful Units

S0,Depriciable Cost Per Unit= 27500/140000= 0.2 Per Unit.

(b)

2016 = 28000 * .2 = 5600

2017 = 33600 * .2 = 6720

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