Question

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

Answer 1

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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