Question - 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.
|
Bus
|
Acquired
|
Cost
|
Salvage
Value
|
Useful Life
in Years
|
Depreciation
Method
|
|
1
|
1/1/12
|
$ 95,300
|
$ 6,900
|
4
|
Straight-line
|
|
2
|
1/1/12
|
130,000
|
12,000
|
5
|
Declining-balance
|
|
3
|
1/1/13
|
79,940
|
7,700
|
4
|
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 120,400. Actual miles of use in the first 3 years were: 2013, 24,000; 2014, 32,900; and 2015, 29,700.
For Bus #3, calculate depreciation expense per mile under units-of-activity method.
Compute the amount of accumulated depreciation on each bus at December 31, 2014.
If bus 2 was purchased on April 1 instead of January 1, what is the depreciation expense for this bus in 2012 and 2013?