On January 2, 2015, the Matthews Band acquires sound equipment for concert perfo

Question

On January 2, 2015, the Matthews Band acquires sound equipment for concert performances at a cost of $65,800. The band estimates it will use this equipment for four years, during which time it anticipates performing about 200 concerts. It estimates that after four years it can sell the equipment for $2,000. During year 2015, the band performs 45 concerts.  

Compute the year 2015 depreciation using the units-of-production method.

calculate 2015 depreciation expense:

-Depreciation per cocert

-Concerts in 2015

-Deprciation in 2015

Explanation / Answer

Compute the year 2015 depreciation using the units-of-production method

Depreciation per concert : (Original cost-salvage value)/estimated total concerts

                                   = (65800-2000)/200

Depreciation per concert = 319 per concert

Concerts in 2015 = 45 concerts

depreciation in 2015 = (45*319) = 14355

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