Question: Tuscany Tours uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2008, at a cost of $115,000. Over its

Tuscany Tours uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2008, at a cost of $115,000. Over its five-year useful life, the bus is expected to be driven 100,000 miles. Salvage value is expected to be $9,000.

(a) Compute the depreciation cost per unit.

(b) Prepare a depreciation schedule assuming actual mileage was: 2008, 24,000; 2009, 36,000; 2010, 20,000; and 2011, 20,000.

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