In recent years, Blue Spruce Transportation purchased three used buses. Because of frequent turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each bus, and various methods have been used. Information concerning the buses is summarized in the table below. Useful Life Salvage Value Depreciation Bus Acquired Cost in Years Method 1 Jan. 1, 2020 $ 95,600 $ 8,000 4 Straight-line 2 Jan. 1, 2020 119,000 12,000 Declining-balance 3 Jan. 1, 2021 91,300 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 119,000. Actual miles of use in the first 3 years were 2021, 28,000; 2022, 35,000; and 2023, 31,000. (a1) Your answer is correct. 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 2$ 0.7 per mile eTextbook and Media Attempts: unlimited (a2) Your answer is incorrect. Compute the amount of accumulated depreciation on each bus at December 31, 2022. Accumulated depreciation BUS 1 BUS 2 $ BUS 3

In recent years, Blue Spruce Transportation purchased three used buses. Because of frequent turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each bus, and various methods have been used. Information concerning the buses is summarized in the table below. Useful Life Salvage Value Depreciation Bus Acquired Cost in Years Method 1 Jan. 1, 2020 $ 95,600 $ 8,000 4 Straight-line 2 Jan. 1, 2020 119,000 12,000 Declining-balance 3 Jan. 1, 2021 91,300 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 119,000. Actual miles of use in the first 3 years were 2021, 28,000; 2022, 35,000; and 2023, 31,000. (a1) Your answer is correct. 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 2$ 0.7 per mile eTextbook and Media Attempts: unlimited (a2) Your answer is incorrect. Compute the amount of accumulated depreciation on each bus at December 31, 2022. Accumulated depreciation BUS 1 BUS 2 $ BUS 3

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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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truck costing $20,000 was purchased on January 1, 2004. It was depreciated using the straight-line method with an estimated useful life of 4 years and a salvage value of $2,000. If the truck is sold at the end of 2005 for $6,000, how much gain or loss will be recognized?
On January 1, Year 1 Missouri Company purchased a truck that cost $35,000. The truck had an expected useful life of 10 years and a $3,000 salvage value. Missouri uses the double declining- balance method. What is the amount of depreciation expense recognized in Year 2? Multiple Choice $5,600 $7,000 $3,500 $5,120
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During the current year, Yost Company disposed of three different assets. On January 1 of the current year, prior to the disposal of the assets, the accounts reflected the following: Accumulated Depreciation Asset Machine A Machine B Original Cost Residual Value Estimated Life $33,000 $3,000 12 years 16,800 10 years Machine C 5,100 17 years 140,000 75,600 (straight line) The machines were disposed of during the current year in the following ways: a. Machine A: Sold on January 1 for $7,500 cash. $25,000 (10 years) 98,560 (8 years) 49,765 (12 years) b. Machine B: Sold on December 31 for $54,120; received cash, $43,296, and an $10,824 interest-bearing (12 percent) note receivable due at the end of 12 months. c. Machine C: On January 1, this machine suffered irreparable damage from an accident. On January 10, a salvage company removed the machine at no cost. P8-5 Part 1 Required: 1. Give all journal entries related to the disposal of each machine in the current year. a. Machine A. b.…
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