Determine the depreciation rates per mile for each car

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Question - Mark's, a popular pizza hang-out, has a thriving delivery business. Mark's has a fleet of three delivery automobiles. The company uses the units-of-activity method of depreciation. Prior to making the entry for this year's depreciation expense, the subsidiary ledger for the fleet is as follows:

Car

Cost

Salvage Value

Estimated
Life in Miles

Accumulated
Depr.-Beg.
of the Year

Miles Operated
During Year

1

$20,090

$3,500

79,000

$2,560

21,000

2

15,350

2,700

55,000

2,320

23,500

3

21,940

2,500

72,000

2,300

20,500

Required -

(a) Determine the depreciation rates per mile for each car.

(b) Determine the depreciation expense for each car for the current year.

Reference no: EM133151550

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