Question

Required information [The following information applies to the questions displayed below.] Part 1 of 3 Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $48,400. The machine's useful life is estimated at 10 years, or 394,000 units of product, with a $9,000 salvage value. During its second year, the machine produces 33,400 units of product. points Determine the machine's second-year depreciation and year end book value under the straight-line method. eBook Straight-Line Depreciation Hint Choose Numerator: 1 Choose Denominator: Annual Depreciation Expense = Depreciation expense Print Year 2 Depreciation Year end book value (Year 2)

Answer 1

Straight-Line Depreciation Choose Numerator Choose Denominator Annual Depreciation Expense Depreciation Expense 3,940 = $ Cost - Salvage Value 39,400 Year 2 Depreciation Year 2 End Book Value (Year 2) Useful Life 10 3,940 40,520

Cost of Machine = $48,400
Salvage Value = $9,000
Useful Life = 10 years

Annual Depreciation Expense = (Cost of Machine - Salvage Value) / Useful Life
Annual Depreciation Expense = ($48,400 - $9,000) / 10
Annual Depreciation Expense = $3,940

Year 1 Depreciation = $3,940
Year 2 Depreciation = $3,940

Year End Book Value (Year 2) = Cost of Machine - Year 1 Depreciation - Year 2 Depreciation
Year End Book Value (Year 2) = $48,400 - $3,940 - $3,940
Year End Book Value (Year 2) = $40,520