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.

For the declining-balance method, the company uses the double-declining rate. For the units-of-activity method, total miles are expected to be 120,000. Actual miles of use in the first 3 years were 2016, 24,000; 2017, 34,000; and 2018, 30,000.

Instructions

(a) Compute the amount of accumulated depreciation on each bus at December 31, 2017.

(b) 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?

Transcribed Image Text:

Salvage Useful Life Value Bus Acquired Cost in Years Depreciation Method $ 96,000 $ 6,000 Straight-line Declining-balance Units-of-activity 1 1/1/15 5 1/1/15 110,000 92,000 10,000 8,000 4 3 1/1/16 5