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This is my question and I want a better way of understanding the question so I can get to the correct answer:In recent years, Juresic 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 below:

Bus Acquired Cost Salvage Value Useful Life in Years Deprec. Method
1 1/1/08 $96,000 $6,000 5 Straight-Line
2 1/1/08 $120,000 $10,000 4 Declining-Balance
3 1/1/09 $80,000 $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, 2009, 24,000; 2010, 34,000; and 2011, 30,000.

Instructions:

(a) Compute the amount of accumulated depreciation on each bus at December 31,2010

(b) If bus no. 2 was purchased on April 1st instead of Jan. 1st, what is the depreciation expense for this bus in (1) 2008 and (2) 2009?

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M9980496

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