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Murrays Ltd. purchased a new bus for $200,000. The company expects the bus to be used for trips between Sydney and Canberra for 10 years, or 800,000 miles, with an estimated residual value of $30,000 at the end of that time. During the 3rd year the bus was driven 96,000 miles. Calculate the depreciation expense for the 3rd year for each of the methods below. Show your solutions. I. Straight-line  II. Diminishing balance at 20% p.a.  III. Units-of-activity

Murrays Ltd. purchased a new bus for $200,000. The company expects the bus to be used for trips between Sydney and Canberra for 10 years, or 800,000 miles, with an estimated residual value of $30,000 at the end of that time. During the 3rd year the bus was driven 96,000 miles. Calculate the depreciation expense for the 3rd year for each of the methods below. Show your solutions. I. Straight-line  II. Diminishing balance at 20% p.a.  III. Units-of-activity

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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Murrays Ltd. purchased a new bus for $200,000. The company expects the bus to be used for trips between Sydney and Canberra for 10 years, or 800,000 miles, with an estimated residual value of $30,000 at the end of that time. During the 3rd year the bus was driven 96,000 miles.

Calculate the depreciation expense for the 3rd year for each of the methods below.

Show your solutions.
I. Straight-line 
II. Diminishing balance at 20% p.a. 
III. Units-of-activity 

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