Question: Wheeler Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2006, at a cost of $148,000. Over

Wheeler Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2006, at a cost of $148,000. Over its 4-year useful life, the bus is expected to be driven 100,000 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: 2006, 26.000: 2007. 32,000:

2008, 25,000; and 2009, 17,000.

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