Landos sister, Jenna, is taking accounting classes and has informed Lando that he has to record depreciation on his lawnmower and other equipment. Lando purchased all of his equipment in 2020 and expects it to last for around 8 years with the current level of use. One of the lawnmowers was acting up this year so he paid $500 in maintenance. The repairman said it should extend its life for another 2 years with the installation of a new power belt. Lando has classified this as an expense, but is unsure of its implications. Jenna also mentioned for a proper income statement, he has to record cost of goods sold and operating expenses and assign depreciation as overhead. Lando had a long day and didnt really understand what Jenna was asking of him. He is trying to decipher how can he apply depreciation as an overhead expense and why tracking cost really matter when hes making money.