What is the depreciation expense for the bus

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Reference no: EM132534826

In the 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.

Bus          Acquired Cost           Salvage Value        Useful life in years       Depreciation method

1            1/1/18 $96,000            $6,000                       5                       Straight-line

2                1/1/18 $110,000       $10,000                      4                       Declining-balance

3                   1/1/19 $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 first 3 years were 2019, 24,000 ; 2020, 34,000; and 2021, 30,000

Question (a) Compute the mount of accumulated depreciation on each bus at December 31, 2020

Question (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?

Reference no: EM132534826

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