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 $68,600. The band estimates it will use this equipment for 5 years, during which time it anticipates performing about 200 concerts. It estimates that after five years it can sell the equipment for $2,000. During year 2015, the band performs 55 concerts. Compute the year 2015 depreciation using the units-of-production method.

Calculate 2015 depreciation expense:

-Depreciation per concert

-Concerts in 2015

-Depreciation in 2015

Explanation / Answer

Units of production method:

=(68600-2000)/200=$333

depreciation per concert= 333

cocnert in 2015=55

depreciation in 2015=333*55=$18,315

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