Final answer:
The 'Yellow Bus Lines depreciation schedule' pertains to accounting for the depreciation of the bus company's vehicles over time. This is critical for financial reporting and tax calculations, impacting the company's financial statements.
Step-by-step explanation:
The term Yellow Bus Lines depreciation schedule likely refers to option B, which is accounting for vehicle depreciation. In business and accounting, depreciation represents how much of a company's asset value has been used up over time. In the context of a bus company, this would involve calculating the decrease in value of the buses due to wear and tear, age, and obsolescence over a defined period. This schedule is crucial for financial reporting and tax purposes, as it affects the company's balance sheet and income statement.For example, if a bus was purchased for $100,000 and is expected to have a useful life of 10 years with a salvage value of $20,000 at the end, the company might use straight-line depreciation. This would mean the bus depreciates by $8,000 annually ($100,000 purchase price minus $20,000 salvage value, divided by 10 years)To put it into context with the provided additional information, if the bus company operates a route that requires four buses on a 15-minute schedule, each bus being in service is an asset subject to depreciation over its useful life.
The Yellow Bus Lines depreciation schedule refers to accounting for vehicle depreciation. Depreciation is the decrease in value of an asset over time, and in this case, it specifically refers to the reduction in value of the buses owned by Yellow Bus Lines. By creating a depreciation schedule, the company can track the loss in value of its buses over their useful life.To create a depreciation schedule, Yellow Bus Lines would consider factors such as the initial cost of the buses, their expected useful life, and the estimated salvage value at the end of their useful life. The company would then allocate the cost of the buses to each year of their useful life using a depreciation method, such as the straight-line method or the declining balance method.For example, if Yellow Bus Lines purchased a bus for $100,000 and estimated that it would be used for 10 years before being sold for $10,000, they would allocate $9,000 ($100,000 - $10,000) to each year of the bus's useful life. This allows for a gradual reduction in the value of the bus on the company's financial statements over time.