Question

P10-2A 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 summarized as follows.

Salvage Useful Life

Bus Acquired Cost Value in Years Depreciation Method

1 1/1/15 $ 96,000 $ 6,000 5 Straight-line

2 1/1/15 110,000 10,000 4 Declining-balance

3 1/1/16 92,000 8,000 5 Units-of-activity

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

fi rst 3 years were 2016, 24,000; 2017, 34,000; and 2018, 30,000.

Instructions

(a) Compute the amount of accumulated depreciation on each bus at December 31, 2017.

(b) If Bus 2 was purchased on April 1 instead of January 1, what is the depreciation

expense for this bus in (1) 2015 and (2) 2016?​

Answer 1

Answer:

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