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Compute the amount of accumulated depreciation on each bus at December 31, 2020. (I

Compute the amount of accumulated depreciation on each bus at December 31, 2020. (I

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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**Exercise: Calculating Accumulated Depreciation** **Objective:** Compute the amount of accumulated depreciation for each bus as of December 31, 2020. **Instructions:** - Round your answers to zero decimal places, e.g., 2,125. **Table Format:** - **Column Header:** Accumulated Depreciation - **BUS 1:** $ [Enter Amount] - **BUS 2:** $ [Enter Amount] - **BUS 3:** $ [Enter Amount] This exercise involves calculating and entering the depreciation amounts for each bus in the provided fields. Make sure to follow the rounding instruction precisely for accuracy.
Transcribed Image Text:**Exercise: Calculating Accumulated Depreciation** **Objective:** Compute the amount of accumulated depreciation for each bus as of December 31, 2020. **Instructions:** - Round your answers to zero decimal places, e.g., 2,125. **Table Format:** - **Column Header:** Accumulated Depreciation - **BUS 1:** $ [Enter Amount] - **BUS 2:** $ [Enter Amount] - **BUS 3:** $ [Enter Amount] This exercise involves calculating and entering the depreciation amounts for each bus in the provided fields. Make sure to follow the rounding instruction precisely for accuracy.
In recent years, Sheffield 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. **Table Summary:** - **Bus 1:** - Acquired: 1/1/18 - Cost: $98,900 - Salvage Value: $7,500 - Useful Life in Years: 5 - Depreciation Method: Straight-line - **Bus 2:** - Acquired: 1/1/18 - Cost: $128,000 - Salvage Value: $12,000 - Useful Life in Years: 4 - Depreciation Method: Declining-balance - **Bus 3:** - Acquired: 1/1/19 - Cost: $95,000 - Salvage Value: $7,500 - Useful Life in Years: 5 - Depreciation Method: 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 125,000. Actual miles of use in the first 3 years were: - 2019: 27,000 - 2020: 35,000 - 2021: 33,000 **Depreciation Calculation:** For Bus #3, calculate depreciation expense per mile under units-of-activity method. (Round answer to 2 decimal places, e.g., 0.50.) - **Depreciation expense:** $0.70 per mile (Note: The calculated depreciation expense for Bus #3 is correct as indicated in the provided answer.)
Transcribed Image Text:In recent years, Sheffield 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. **Table Summary:** - **Bus 1:** - Acquired: 1/1/18 - Cost: $98,900 - Salvage Value: $7,500 - Useful Life in Years: 5 - Depreciation Method: Straight-line - **Bus 2:** - Acquired: 1/1/18 - Cost: $128,000 - Salvage Value: $12,000 - Useful Life in Years: 4 - Depreciation Method: Declining-balance - **Bus 3:** - Acquired: 1/1/19 - Cost: $95,000 - Salvage Value: $7,500 - Useful Life in Years: 5 - Depreciation Method: 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 125,000. Actual miles of use in the first 3 years were: - 2019: 27,000 - 2020: 35,000 - 2021: 33,000 **Depreciation Calculation:** For Bus #3, calculate depreciation expense per mile under units-of-activity method. (Round answer to 2 decimal places, e.g., 0.50.) - **Depreciation expense:** $0.70 per mile (Note: The calculated depreciation expense for Bus #3 is correct as indicated in the provided answer.)
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