0 Required information (The following information applies to the questions displ

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0 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 $47,000. The machine's useful life is estimated at 10 years, or 390,000 units of product, with a $8,000 salvage value. During its second year, the machine produces 33,000 units of product Determine the machine's second-year depreciation and year end book value under the straight-line method. Straight-Line Depreciation Choose Numerator:I Choose Denominator 2 Depreciation Year end book value (Year 2

Explanation / Answer

Calculation of Depreciation as per straight line Depreciation Cost of Purchase of Machiene = $                47,000.00 Less : Salvage Value $                  8,000.00 Value for Depreciation $                39,000.00 Life of the Machiene = 10 Years Depreciation for the year = ($39,000 / 10 Years) $                  3,900.00 Purchase Value of the Manufacturing Machiene = $                47,000.00 Less: Depreciation of the year 1 = $                  3,900.00 Closing Book Value of the Machiene at year 1 end $                43,100.00 Opening Balance of the Machiene $                43,100.00 Less: Depreciation of the year 2 = $                  3,900.00 Closing Book Value of the Machiene at year 2 end $                39,200.00 Answer = Year 2 Depreciation = $                  3,900.00 Closing Book Value of the Machiene at the Year End 2 = $                39,200.00

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