In recent years, Freeman Transportation purchased three used buses. Because of frequent turnover in the accounting department,
Question:
In recent years, Freeman 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 below.
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, 36,000; and 2021, 31,000.
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?
Step by Step Answer:
Accounting Principles
ISBN: 978-1119419617
IFRS global edition
Authors: Paul D Kimmel, Donald E Kieso Jerry J Weygandt