Waterways Tours uses the units-of-activity method in depreciating its tour boats. One boat was purchased on January 1, 2006, at a cost of $148,000. Over its four-year useful life, the boat is expected to be driven 100,000 miles. Salvage value is expected to be $8,000.
Instructions
(a) Compute the depreciation cost per unit.
(b) Prepare a depreciation schedule assuming actual mileage was: 2008, 26,000: 2009, 32,000: 2010, 25,00; and 2011, 17,000.