Ramirez Company installs a computerized manufacturing machine in its factory at

Question

Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $63,400. The machine's useful life is estimated at 10 years, or 279,000 units of product, with a $9,000 salvage value. During its second year, the machine produces 26,600 units of product Determine the machine's second-year depreciation and year end book value under the straight-line method Straig Annual Depreciation Expense Choose Numerator:Choose Denominator: -Depreciation expense r 2 r end book value (Year 2)

Explanation / Answer

Straight-Line Depreciation

Choose Numerator: / Choose Denominator: = Annual Depreciation Expense Cost minus salvage / Estimated useful life (years) = Depreciation expense $54,400 / 10 = $5,440 Year 2 Depreciation $5,440 Year end book value (Year 2) $52,520

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