Compute the revised depreciation for the second year

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Reference no: EM13257951

On January 2, 2008, the CerritosBand acquires sound equipment for concert performances at a cost of$65,800. The band estimates it will use this equipment for fouryears, during which time it anticipates performing about 200concerts. It estimates that after four years it can sell the equipment for $2,000. During year 2008, the band performs 45concerts. Assume that Cerritos Band chose straight-linedepreciation but realizes early in the second year that due to concert bookings beyond expectations, this equipment will last onlya total of three years. The salvage value remains unchanged. Compute the revised depreciation for the second year.


Book value at point of revision	$	(0%)
Remaining depreciable cost	$	(0%)
Depreciation per year for year 2	$	(0%)

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Cost	$	65,800
Less Accumulated depreciation (first year)		15,950
Book value at point of revision		49,850
Less Salvage value		2,000
Remaining depreciable cost		47,850
Years of life remaining		÷2
Depreciation per year for year 2	$	23,925

Reference no: EM13257951

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