Whippet Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2017, at a cost $117,000. Over its 4-year useful life, the bus is expected to be driven 210,000 miles. Salvage value is expected to be $7,800. (a) Compute the depreciation cost per unit. (Round answer to 3 decimal places, e.g. 6.251) Depreciation cost per unit %24

Whippet Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2017, at a cost $117,000. Over its 4-year useful life, the bus is expected to be driven 210,000 miles. Salvage value is expected to be $7,800. (a) Compute the depreciation cost per unit. (Round answer to 3 decimal places, e.g. 6.251) Depreciation cost per unit %24

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Description: Whippet Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2017, at a cost of$117,000. Over its 4-year useful life, the bus is expected to be driven 210,000 miles. Salvage value is expected to

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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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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Whippet Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2017, at a cost of
$117,000. Over its 4-year useful life, the bus is expected to be driven 210,000 miles. Salvage value is expected to be $7,800.
(a)
Compute the depreciation cost per unit. (Round answer to 3 declmal places, e.g. 6.251)
Depreciation cost per unit
24
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