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 $87,000. The machine's useful life is estimated at 20 years During its second year, the machine produces 33,500 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 Expense Choose Denominator: Choose Numerator: 1 Depreciation expense / Estimated useful life (years) 3,950 Cost minus salvage 87000-8000 Year 2 Depreciation Year end book value (Year 2)

Answer 1

Straight line depreciation Annual Depreciation Expense Depreciation Expense Choose Numerator Choose Denominator (Cost of Machinery - Salvage value) Life of the Machinery 79000 20 3950 Year 2 Depreciation Year end book value (year 2) 3950 79100 Year end Book value = $87000 3950-3950 $79100