Uber Inc purchased a car for $23,500. The car has a salvage value of $3,900 and...

Uber Inc purchased a car for $23,500. The car has a salvage value of $3,900 and is estimated to be in use for 150,000 miles. What is the accumulated depreciation at the end of Year 2 assuming mileage used in year 1 was 16,380, year 2 was 16,930, and year 3 was 22,440? $_______

Expert Solution

Accumulated Depreciation at the end of Year 2		=	$ 4,353

Workings:
Units of Activity method:-

Depreciation expense	=	(Cost - Residual value) / useful value in hours
	=	($23500 - $3900) / 150000 miles
	=	$ 0.13


	Depreciation units	Depreciation per unit		Depreciation expense	Accumulated depreciation
Year 1	16380	$ 0.1307		$ 2,140	$ 2,140
Year 2	16930	$ 0.1307		$ 2,212	$ 4,353
Year 3	22440	$ 0.1307		$ 2,932	$ 7,285

ekkarill92 answered 1 year ago

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