P10-2A Because of frequent turnover in the accounting department - 20300

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P10-2A

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.

Bus      Acquired           Cost     Salvage

Value   Useful Life

in Years            Depreciation 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.

Compute the amount of accumulated depreciation on each bus at December 31, 2010.

Bus 1    \$

Bus 2    \$

Bus 3    \$

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

2008     \$

2009     \$

Solution Description

Bus

Acquired

Cost

Salvage
Value

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