Problem 9-2A (Part Level Submisslon) n recent years, Avery Transpertation for ea

Question

Problem 9-2A (Part Level Submisslon) n recent years, Avery Transpertation for each bus, and various methods were selected. I"formation concerning th, boss surnmatred "de purchased three used bine. necausedino ith min wii itmiini..lil-m A (Part vage Useful Life Value A (Part Bus Acquired Cost Depreclation 98,600 B,000 128,00010,500 78,180 7,500 traight Ine Declining balance Units ol acivity For the unts of activity method,uated to 110 .2 3 years were 2016, 26,500; 2017, 36,000; and 2018, 33,000 (al) E] Your answer is correct. For Bus #3, calculate depreciation expense per mile under units Depreciation expense 12 activity n ethod (mmind answer to ,decima,alite, eo o so) ssion) 0.62 per mile s by Study INK TO X ll Rights sReserved A Divison of Next

Explanation / Answer

a2. Bus 1: Straight line method Depreciation will be same for all year Depreciation=(cost-salvage value)/Useful life=(98600-8000)/5=18120 Accumulated depreciation=18120 Bus 2: Double-declining balance method Acquisition on 01/01/15. Double-declining rate=200% of straight line rate Life of bus=1/4=25% straight line rate Double-declining rate=200%*25%=50% Year 1 Depreciation=128000*50%=64000 Year 2 Beginning balance of asset=128000-64000=64000 Depreciation=64000*50%=32000 Year 3 Beginning balance of asset=64000-32000=32000 Depreciation=32000*50%=16000 Accumulated depreciation=16000 Bus 3: Units of activity method Acquisition on 01/01/16. Depreciation expense=0.62 per mile Activity for year 2=36000 miles Depreciation expense=0.62*36000=22320 Accumulated depreciation=22320

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