Required information The following information applies to the questions displaye

Question

Required information 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 $84,600. The machine's useful life is estimated at 20 years, or 393,000 units of product, with a $6.000 salvage value. During its second year the machine produces 33.300 units of product. Determine the machine's second-year depreciation and year end book value under the straight-line method. Straight-Li Choose Numerator:Choose Denominator: Annual Depreciation Expense Depreciation expense Year 2 Depreciation Year end book value (Year 2)

Explanation / Answer

Straight line depreciation :

Straight line depreciation Choose numerator / Choose denominator = Annual depreciation expense Depreciable base / Useful life = Annual depreciation expense 78600 / 20 = 3930 Year 2 depreciation 3930 Year end Book value (year 2) 76740

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