Freemont Taxi Service uses the units-of-activity method in computing depreciation on its taxicabs. Each cab is expected

Question:

Freemont Taxi Service uses the units-of-activity method in computing depreciation on its taxicabs. Each cab is expected to be driven 150,000 miles. Taxi no. 10 cost $33,500 and is expected to have a of $500. Taxi no. 10 is driven 36,000 miles in year 1 and 22,000 miles in year 2. Compute the depreciation for each year.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...