On January 1, 2059, The Rolling Stones (still the greatest rock'n'roll band in the history of the world) purchased new microphones for $68,400. Mick, Keith, Charlie and Ron estimate that the band will be able to use these microphones for four years and perform 200 concerts. They further assume that after four years they can sell the microphones for $1,000. During 2059, the Stones play 45 concerts. What is the depreciation on the microphones recorded during 2059, presuming that the band uses the units-of-production method? Select formula for the depreciation rate of Units of Production: Calculate the first year depreciation expense: Depreciation per concert Concerts in first year Depreciation in first year
On January 1, 2059, The Rolling Stones (still the greatest rock'n'roll band in the history of the world) purchased new microphones for $68,400. Mick, Keith, Charlie and Ron estimate that the band will be able to use these microphones for four years and perform 200 concerts. They further assume that after four years they can sell the microphones for $1,000. During 2059, the Stones play 45 concerts. What is the depreciation on the microphones recorded during 2059, presuming that the band uses the units-of-production method? Select formula for the depreciation rate of Units of Production: Calculate the first year depreciation expense: Depreciation per concert Concerts in first year Depreciation in first year
Chapter10: Project Cash Flows And Risk
Section: Chapter Questions
Problem 4PROB
Related questions
Concept explainers
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Topic Video
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning