Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Whippet Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2017, for $100,000. Over its 4-year useful life, the bus is expected to be driven 160,000 miles. Salvage value is expected to be $8,000.
Compute the depreciation cost per unit.
Depreciation per unit= (100,000 - 8,000)/160,000= $0.575 per mile.
Prepare a depreciation schedule assuming actual mileage was: 2017, 40,000; 2018, 52,000; 2019, 41,000; and 2020, 27,000.
Annual depreciation= [(original cost - salvage value)/useful life of production in units]*units produced
2017= 0.575*40,000= 23,000
2018= 0.575*52,000= 29,900
2019= 0.575*41,000= 23,575
2020= 0.575*27,000= 15,525
