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 $44,200. The machine's useful life is estimated at 10 years or 392.000 units of product, with a $5,000 salvage value During its second year, the machine produces 33,200 units of product Exercise 8-4 Straight-line depreciation LO P1 Determine the machine's second year depreciation and year end book value under the straight line method. Straight-Line Depreciation Annual Depreciation Choose Numerator: Choose Denominator Expense Depreciation expense EO Cost minus salvage Estimated useful lide (years) 39,2004 Year 2 Depreciation Year end book value (Year 2)

Answer 1

	Straight-Line Depreciation
	Choose Numerator:	/	Choose Denominator:	=	Annual Depreciation Expense
	Cost minus salvage	/	Estimated useful life (years)	=	Depreciation expense
	39200	/	10	=	3920
	Year 2 Depreciation	3920
	Year end Book value(Year 2)	36360
Units-of-production Depreciation
	Choose Numerator:	/	Choose Denominator:	=	Annual Depreciation Expense
	Cost minus salvage	/	Total units of production	=	Depreciation expense per unit
	39200	/	392,000	=	0.10
Year	Annual Production (units)		Depreciation Expense
2	33,200		3320
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	44200	x	20%	=	8840
Second year's depreciation	35360	x	20%	=	7072