In recent years, Whispering Winds 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 SalvageValue Useful Lifein Years DepreciationMethod 1 1/1/18 $ 95,000 $ 5,000 4 Straight-line 2 1/1/18 110,000 10,000 4 Declining-balance 3 1/1/19 88,000 7,500 4 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 115,000. Actual miles of use in the first 3 years were 2019, 23,000; 2020, 31,000; and 2021, 29,000. 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 $ per mile Compute the amount of accumulated depreciation on each bus at December 31, 2020. (Round answers to 0 decimal places, e.g. 2,125.) Accumulated depreciation BUS 1 $ BUS 2 $ BUS 3 $ If Bus 2 was purchased on April 1 instead of January 1, what is the depreciation expense for this bus in (1) 2018 and (2) 2019? (Round answers to 0 decimal places, e.g. 2,125.) (1)2018 (2)2019 Depreciation expense $ $

Name: In recent years, Whispering Winds Transportation purchased three used
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Description: In recent years, Whispering Winds 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. Informati

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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In recent years, Whispering Winds 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	1/1/18	$ 95,000	$ 5,000	4	Straight-line
2	1/1/18	110,000	10,000	4	Declining-balance
3	1/1/19	88,000	7,500	4	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 115,000. Actual miles of use in the first 3 years were 2019, 23,000; 2020, 31,000; and 2021, 29,000.

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

per mile

Compute the amount of accumulated depreciation on each bus at December 31, 2020. (Round answers to 0 decimal places, e.g. 2,125.)

		Accumulated depreciation
BUS 1		$
BUS 2		$
BUS 3		$

If Bus 2 was purchased on April 1 instead of January 1, what is the depreciation expense for this bus in (1) 2018 and (2) 2019? (Round answers to 0 decimal places, e.g. 2,125.)

		(1) 2018		(2) 2019
Depreciation expense		$		$

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