Jayhawk Bus Lines uses the units-of-activity method in depreciating its buses.

One bus was purchased on January 1, 2014, 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: 2014, 40,000; 2015, 52,000; 2016, 41,000; and 2017, 27,000.

AppendixLO1