Required information Use the following information for the Exercises below. The

Question

Required information Use the following information for the Exercises below. The following information applies to the questions displayed below.) Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $43,500. The machine's useful life is estimated at 10 years, or 385,000 units of product, with a $5,000 salvage value. During its second year, the machine produces 32,500 units of product. Exercise 8-6 Double-declining-balance depreciation LO P1 Determine the machine's second-year depreciation using the double-declining-balance method. Double-declining-balance Depreciation Annual Depreciation Expense Choose Factors: Choose Factor(%) Beginning book value | x Double the straight-line rate Depreciation expense = First year's depreciation Second year's depreciation 0

Explanation / Answer

Double declining depreciation rate = 1/10*2 = 20% Double-declining-balance Depreciation Choose Factors: x Choose Factor(%) = Annual Depreciation Expense Beginning book value x Double the straight-line rate = Depreciation expense First year's depreciation $43,500 x 20% = $8,700 Second year's depreciation $34,800 x 20% = $6,960

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