On January 1, the Matthews Band pays $66,400 for sound equipment. The band estimates it will...

 

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On January 1, the Matthews Band pays $66,400 for sound equipment. The band estimates it will use this equipment for four years and after four years it can sell the equipment for $1,000. Matthews Band uses straight-line depreciation but realizes at the start of the second year that this equipment will last only a total of three years. The salvage value is not changed. Compute the revised depreciation for both the second and third years. Book value at point of revision Remaining depreciable cost Depreciation per year for years 2 and 3 $ 50,050 On January 1, the Matthews Band pays $66,400 for sound equipment. The band estimates it will use this equipment for four years and after four years it can sell the equipment for $1,000. Matthews Band uses straight-line depreciation but realizes at the start of the second year that this equipment will last only a total of three years. The salvage value is not changed. Compute the revised depreciation for both the second and third years. Book value at point of revision Remaining depreciable cost Depreciation per year for years 2 and 3 $ 50,050

Answer rating: 100% (QA)

To calculate the revised depreciation for the second and third years we need to determine the remaining depreciable cost and allocate it over the rema... View the full answer