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.
|
Salvage |
Useful Life |
||||
|
Bus |
Acquired |
Cost |
Value |
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.
Instructions
(a) Compute the amount of accumulated depreciation on each bus at December 31, 2010.
(b) 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?