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 shown 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 2019, 24,000; 2020, 34,000; and 2021, 30,000.

Instructions

a. Compute the amount of accumulated depreciation on each bus at December 31, 2020.

b. If Bus 2 was purchased on April 1 instead of January 1, what is the depreciation expense for this bus in (1) 2018 and (2) 2019?

Transcribed Image Text:

Useful Life in Years Depreciation Method Bus Acquired Cost Salvage Value Straight-line $ 6,000 1/1/18 24 96,000 1/1/18 110,000| Declining-balance 2 10,000 Units-of-activity 1/1/19 92,000 8,000