Yello Bus lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2019, at a cost of $148,000. Over its 4-year useful life, the bus in expected to be driven 100,000 miles. Salvage value is expected to be $8,000.

Instructions

1. Compute the depreciable cost per unit
2. Prepare a depreciation schedule assuming actual mileage was 2019: 26,000; 2020: 32,000; 2021: 25,000; and 2022: 17,000.

Solution