Question - In recent years, Juresic Transportation purchased 3 busses. Because of frequent turnoover in the accounting department, a different accountant selected the depreciation method for each bus, and various methods were selected.
|
Bus
|
Aquired
|
Cost
|
Salvage Value
|
Useful Life in Years
|
Depreciation Method
|
|
1
|
1/1/2006
|
96000
|
6000
|
5
|
Straight-line
|
|
2
|
1/1/2006
|
120000
|
10000
|
4
|
Declining-balance
|
|
3
|
1/1/2007
|
80000
|
80000
|
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: 2007, 24,000; 2008, 34,000; and 2009, 30,000.
a. Compute the amount of accumulated depreciation on each bus at December 31, 2008.
b. If bus no. 2 was purchased on April 1 instead of January 1, what is the depreciation expense for this bus in (1) 2006 and (2) 2007?