On January 2, 2008, the Cerritos Band acquires sound equipmentfor concert perfor
ID: 2457551 • Letter: O
Question
On January 2, 2008, the Cerritos Band acquires sound equipmentfor concert performances at a cost of $65,800. The band estimatesit will use this equipment for four years, during which time itanticipates performing about 200 concerts. It estimates that afterfour years it can sell the equipment for $2,000. During year 2008,the band performs 45 concerts. Compute the year 2008 depreciationusing the (1) straight-line method and (2) units-of-productionmethod. (Omit the "$" sign in your response.)
(1)
Straight-line method
$
(2)
The Units of Production method
$
(1)
Straight-line method
$
(2)
The Units of Production method
$
Explanation / Answer
4 Years
( 65,800 - 2,000 ) /4
( 65,800 - 2,000 ) / 200
319
Depreciation for 2008 using
45* 319
Units of Production Method
Depreciation for 2008using
14355
Units of ProductionMethod
Given: Cost of the Equipment 65800 Life of Equipment4 Years
Salvage Value 2000 Estimated Concerts 200 Depreciation for 2008 using( 65,800 - 2,000 ) /4
Straight Line Method 15,950 Depreciation PerConcert( 65,800 - 2,000 ) / 200
319
Depreciation for 2008 using
45* 319
Units of Production Method
Depreciation for 2008using
14355
Units of ProductionMethod
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