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Damm [24]
3 years ago
6

On January 1, the Matthews Band pays $67,600 for sound equipment. The band estimates it will use this equipment for four years a

nd perform 200 concerts. It estimates that after four years it can sell the equipment for $1,000. During the first year, the band performs 45 concerts. Compute the first-year depreciation using the units-of-production method.
Business
1 answer:
meriva3 years ago
8 0

Answer: $14,985

Explanation:

Using the Units-of-Production method means that the asset is depreciated based on how many times it is used.

The formula is;

= ( Cost - Salvage Value)/Total Usage

= (67,600 - 1,000) / 200

= $333 per concert

Equipment depreciates by $333 per concert.

First year has 45 concerts;

= 333 * 45

= $14,985

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