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

Question:

Pack in 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 10 cost $27,500 and is expected to have a of $500. Taxi 10 was driven 28,000 miles in 2009 and 30,000 miles in 2010. 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...