In recent years, 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 |
1/1/12 |
$ 96,000 |
$ 6,000 |
5 |
Straight-line |
|
2 |
1/1/12 |
110,000 |
10,000 |
4 |
Declining-balance |
|
3 |
1/1/13 |
92,000 |
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 2013, 24,000; 2014, 34,000; and 2015, 30,000.
Instructions
(a)Compute the amount of accumulated depreciation on each bus at December 31, 2014.
(b)If Bus 2 was purchased on April 1 instead of January 1, what is the depreciation expense for this bus in (1) 2012 and (2) 2013?