required information the following information applies to the questions displayed below. on january 1, the…

required information the following information applies to the questions displayed below. on january 1, the matthews band pays $68,400 for sound equipment. the band estimates it will use this equipment for four years and perform 200 concerts. it estimates that after four years it can sell the equipment for $1,000. during the first year, the band performs 45 concerts. compute the first - year depreciation using the straight - line method. straight - line depreciation choose numerator: / choose denominator: = annual depreciation expense / = depreciation expense / =

required information the following information applies to the questions displayed below. on january 1, the matthews band pays $68,400 for sound equipment. the band estimates it will use this equipment for four years and perform 200 concerts. it estimates that after four years it can sell the equipment for $1,000. during the first year, the band performs 45 concerts. compute the first - year depreciation using the straight - line method. straight - line depreciation choose numerator: / choose denominator: = annual depreciation expense / = depreciation expense / =

Answer

Explanation:

Step1: Calculate depreciable cost

Depreciable cost = Cost - Salvage value. Cost is $68,400 and salvage value is $1,000. So, Depreciable cost = $68,400 - $1,000=$67,400.

Step2: Determine useful - life in years

The useful - life of the equipment is 4 years.

Step3: Compute annual depreciation expense

Annual depreciation expense = $\frac{\text{Depreciable cost}}{\text{Useful life in years}}$. Substituting the values, we get Annual depreciation expense = $\frac{67400}{4} = 16850$.

Answer:

$16,850$