In recent years, Harper Transportation purchased three used buses. Because of frequent employee turnover in the accounting department, a different accountant selected the depreciation method for each bus, and various methods have been used. Information concerning the buses is summarized in the table below.
|
|
|
Salvage
|
Useful Life
|
|
|
Bus
|
Acquired
|
Cost
|
Value
|
(in years)
|
Depreciation Method
|
|
1
|
Jan. 1, 2011
|
$ 96,000
|
$ 6,000
|
5
|
Straight-line
|
|
2
|
Jan. 1, 2011
|
135,000
|
10,000
|
4
|
Declining-balance
|
|
3
|
Jan. 1, 2011
|
100,000
|
4,000
|
5
|
Units-of-activity
|
For the declining-balance method, Harper Transportation uses the double-declining rate. For the units-of-activity method, total miles are expected to be 160,000. Actual miles of use in the first 3 years were: 2011, 29,000; 2012, 34,000; and 2013, 35,000.
Instructions
(a) Compute the amount of accumulated depreciation on each bus at December 31, 2013.
(b) If Bus 2 was purchased on March 1 instead of January 1, what would be the depreciation expense for this bus in 2011? In 2012?