Can i get help with this one? **Sound Equipment Depreciation Calculation Using Units of Production Method****Problem Statement:**On January 1, the Matthews Band pays $66,600 for sound equipment. The band estimates it will use this equipment for five years and perform 200 concerts. It estimates that after five years it can sell the equipment for $2,000. During the first year, the band performs 55 concerts.**Objective:**Compute the first-year depreciation using the units-of-production method.**Units-of-Production Method:**The units-of-production method calculates depreciation based on usage. This method is suitable when the wear and tear of an asset are directly related to its use.**Steps to Calculate First-Year Depreciation:**1. **Calculate the Depreciation Per Concert:** 1. **Depreciable Base:** - Cost of the equipment: $66,600 - Residual Value: $2,000 - Depreciable Base = Cost of the Equipment - Residual Value - Depreciable Base = $66,600 - $2,000 = $64,600 2. **Total Estimated Usage:** - Total Estimated Concerts: 200 concerts 3. **Depreciation Per Concert:** - Depreciation Per Concert = Depreciable Base / Total Estimated Concerts - Depreciation Per Concert = $64,600 / 200 = $323 per concert2. **Calculate the First-Year Depreciation Expense:** 1. **Concerts in First Year:** - Total First Year Concerts: 55 concerts 2. **Depreciation in First Year:** - Depreciation in First Year = Depreciation Per Concert * Concerts in First Year - Depreciation in First Year = $323 * 55 = $17,765**Summary Chart for Calculating Depreciation Rate of Units of Production:**| Calculate the first-year depreciation expense: | || ---------------------------------------------- | ------------------------------------ || Depreciation per concert | || Concerts in first year | 55 || Depreciation in first year | $17,765 |**Note:**The units-of-production method aligns the cost of the equipment directly with its usage, making it an accurate reflection of the wear and tear experienced over the period under review

Name: Can i get help with this one? **Sound Equipment Depreciation Calculati
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Description: Can i get help with this one? **Sound Equipment Depreciation Calculation Using Units of Production Method****Problem Statement:**On January 1, the Matthews Band pays $66,600 for sound equipment. The band estimates it will use this equipment for five

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On January 1, the Matthews Band pays $66,600 for sound equipment. The band estimates it will use this equipment for five years and perform 200 concerts. It estimates that after five years it can sell the equipment for $2,00O. During the first year, the band performs 55 concerts. Compute the first-year depreciation using the units-of-production method. Select formula for the depreciation rate of Units of Production: Calculate the first year depreciation expense: Depreciation per concert Concerts in first year Depreciation in first year

On January 1, the Matthews Band pays $66,600 for sound equipment. The band estimates it will use this equipment for five years and perform 200 concerts. It estimates that after five years it can sell the equipment for $2,00O. During the first year, the band performs 55 concerts. Compute the first-year depreciation using the units-of-production method. Select formula for the depreciation rate of Units of Production: Calculate the first year depreciation expense: Depreciation per concert Concerts in first year Depreciation in first year

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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