Whippet Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January
Question:
Whippet Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2022, at a cost of $100,000. Over its 4-year useful life, the bus is expected to be driven 160,000 miles. Salvage value is expected to be $8,000.
Instructions
a. Compute the depreciation cost per unit.
b. Prepare a depreciation schedule assuming actual mileage was 2022, 40,000; 2023, 52,000; 2024, 41,000; and 2025, 27,000.
Salvage ValueSalvage 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...
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a Depreciation cost per unit is 575 per mile 100000 8000 160000 b C...View the full answer
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