On January 1, the Matthews Band pays $66,800 for sound equipment. The band estimates it will use this equipment for four years and after four years it can sell the equipment for $1,000. Matthews Band uses straight-line depreciation but realizes at the start of the second year that this equipment will last only a total of three years. The salvage value is not changed. Compute the revised depreciation for both the second and third years. Book value at point of revision Remaining depreciable cost Depreciation per year for years 2 and 3

On January 1, the Matthews Band pays $66,800 for sound equipment. The band estimates it will use this equipment for four years and after four years it can sell the equipment for $1,000. Matthews Band uses straight-line depreciation but realizes at the start of the second year that this equipment will last only a total of three years. The salvage value is not changed. Compute the revised depreciation for both the second and third years. Book value at point of revision Remaining depreciable cost Depreciation per year for years 2 and 3

Name: QS 8-10 (Algo) Computing revised depreciation LO C2On January 1, the
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Description: QS 8-10 (Algo) Computing revised depreciation LO C2On January 1, the Matthews Band pays $66,800 for sound equipment. The band estimates it will use this equipment for four years andafter four years it can sell the equipment for $1,000. Matthews Band

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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QS 8-10 (Algo) Computing revised depreciation LO C2
On January 1, the Matthews Band pays $66,800 for sound equipment. The band estimates it will use this equipment for four years and
after four years it can sell the equipment for $1,000. Matthews Band uses straight-line depreciation but realizes at the start of the
second year that this equipment will last only a total of three years. The salvage value is not changed.
Compute the revised depreciation for both the second and third years.
Book value at point of revision
Remaining depreciable cost
Depreciation per year for years 2 and 3

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