On January 1st them Matthew Band pay 68000 for sound Equipment The band estimate it will use this quite ment for 4 years and perform 200 concert it's estimated that after 4 years it
can sell the equipment for 1000 during the 1st year the band
perform 45 concert complete the 1st year depression using the units
of product method
Calculation of depreciation under units of product method.
Depreciable Amount
= Total cost - Salvage value
= 68000-1000
= 67000
Depreciation
= (Depreciable Amount × concert during the year)/Total expected concert
= (67000 × 45)/200
= 15075
Note: Under units of product method of depreciation depreciable amount(total cost - salvage value) is depreciated over the life of asset according to their product produce.
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