Question - In Recent year, 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
|
1/1/15
|
$99,400
|
$7,500
|
4
|
Straight-line
|
|
2
|
1/1/15
|
118,000
|
10,000
|
4
|
Declining-balance
|
|
3
|
1/1/16
|
82,400
|
8,000
|
4
|
Units-of-activity
|
For the declining 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 2016, 27,000; 2017, 31,500; and 2018, 31,500.
Required - For Bus#3, calculate depreciation expense per mile under units-of-activity method.