Motion Picture Herald (Jan-Mar 1956)

periods of depreciation. Example: Equipment worth $100,000 with expected life of ten years would be depreciated at $10,000 per year. 2. SINKING FUND METHOD — Money is definitely set aside yearly and I ESTIMATED EQUIPMENT LIFE: List applying to theatres, offered as a guide in recent reprint of Government Bulletin "F” (first issued in 1942). Generally, theatre equipment has an average life of 15 years. Item lives applicable to theatres are as follows (numerals refer to years) : Cabinets, record and film 15 Carpets 8 Choppers, ticket 10 Counterweight systems 20 Counting machines 10 Curtains : Asbestos or steel 33 Machine automatic 20 Stage 8 Decorations, painted mural, etc. 12 Dimmers, stage and studio 8 Draperies 8 Elevators, orchestra pit 20 Fans, exhaust and ventilating 15 Furniture, lobby and foyer 15 Lights, stage, Kleig, etc. 20 Linoleum and rubber flooring . 10 Mats, rubber and linoleum 10 Mirrors 20 Orchestra phones 10 Orchestra stands and chairs 15 Organs 10 Pianos 10 Projectors : Lantern slide 15 Motion picture 10 Registers, ticket 10 Rewinders, film 15 Scenery, stage 3 Seats 20 Signal systems 15 Sound equipment 10 Splicers, film 15 Stereopticons 15 Transverters 15 Waxers and renovators, film 10 banked in a special fund, with consideration given to interest being earned. 3. PERIODIC APPRAISAL— are called in at specified intervals to appraise current value, Avriting off the difference between it and the last appraisal as depreciation. 4. IFORKING HOURS METHOD — Applicable to machinery Avhich has preestablished life value. 5. DECLINING BALANCE METHOD — IVIentioned earlier. The theory is that heaviest amortization should be charged off early in the life of equipment and reduced sharply as maintenance charges increase with age and usage. There are several other methods, but they do not apply to our kind of operations. One variation, hoAtever, of the Declining Halance Method might be mentioned and that is the Sum of the Digits iMethod. This latter method depreciates equipment 100%, rather than leaving a small residual value as in the Declining Balance system. Sum of the Digits means that the number of years of anticipated life is listed in reverse order and added, with depreciation, in the same reverse order percentagewise. Example: An article with four years life is listed 4, 3, 2 and 1, with the total equaling 10. That means the depreciation would be carried out in lOths, with 4/lOths charged off the first year, 3/lOths, 2/lOths, and finally 1/IOth. This is a slower rate and seems to us to have few advantages, though it is a choice open to you. CAN METHODS BE CHANGED? Once a system has been established, permission of the Internal Revenue Service must be obtained to make a change, but sufficient reasons will make that possible. Also, Avith the purchase of new equipment, depreciation can be set up on the Declining Balance method separate from previously acquired equipment already booked for other depreciation methods — that is, if it should be your desire to utilize this faster charge-off accounting procedure. Should you change your methods? Check Avith a reputable accountant familiar with theatre problems and get his advice after studying the foregoing optional methods. Common sense Avill stand you in good stead Avhile discussing and setting up your schedules with the tax collector, who also appreciates consistency in whatever system you follow. Protecting Equipment While Drive-In Is Closed (Continued from page 25) upon by Altec service technicians. They point out that aside from its messy qualities, it is hard to remove Avhen opening time comes round. In this connection, linseed oil is regarded as the lesser of two evils, but an electric heater in the booth is strongly recommended. Where speakers are removed from ramp posts, as in the case of the Key drive-in, there naturally is no load. It should be made certain that ramp switches are turned off. Leaving them on puts a resistance load on the amplifiers. If speakers are removed and stored for the winter season, the amplifiers should not be operated unloaded. Warm-up runs of the amplifiying system should be conducted periodically. Two Altec field engineers Avere used in the accompanying pictorial examples only in the interests of comprehensive coverage for the benefit of Better The.atres readers. A single field man, Cal iVIervyne in tlie case of the Key outdoor operation, is ordinarily used to supervise the procedures dealt with herein. NEW . . . REVISED . . . 8th Edition ot Bluebook of Projection The standard textbook on motion picture projection and sound reproduction. . . . Extensively revised to deal with the latest technical developments in motion picture projection and sound, and reorganized to facilitate study and reference, the Bluebook with this edition includes a practical discussion of Television especially prepared for the instruction of theatre projectionists, and of new techniques for advancement of the art of the motion picture. $7.25 postpaid QUIGLEY PUBLICATIONS 1270 SIXTH AVENUE, NEW YORK 20, N. Y. BETTER THEATRES SECTION 35