On January 1, the Matthews Band pays $67,400 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. 3-4 (Algo) Units-of-production depreciation LO P1 mute the first-year depreciation using the units-of-production method. t formula for the depreciation rate of Units of Production: late the first year depreciation expense Depreciation per concert Concerts in first year Depreciation in first year
On January 1, the Matthews Band pays $67,400 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. 3-4 (Algo) Units-of-production depreciation LO P1 mute the first-year depreciation using the units-of-production method. t formula for the depreciation rate of Units of Production: late the first year depreciation expense Depreciation per concert Concerts in first year Depreciation in first year
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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![Use the following information for the Quick Studies below. (Algo)
[The following information applies to the questions displayed below.]
On January 1, the Matthews Band pays $67,400 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.
QS 8-4 (Algo) Units-of-production depreciation LO P1
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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1eaae1fc-ed33-449b-be0f-97d8c49ba64f%2F0a32b33f-66ca-4c2c-a510-d8f8c526ca17%2Fbm4ch4j_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Use the following information for the Quick Studies below. (Algo)
[The following information applies to the questions displayed below.]
On January 1, the Matthews Band pays $67,400 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.
QS 8-4 (Algo) Units-of-production depreciation LO P1
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
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