Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $86,800.
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Question “Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $86,800.”
Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $86,800. The machine’s useful life is estimated at 20 years, or 404,000 units of product, with a $6,000 salvage value. During its second year, the machine produces 34,400 units of product.
Determine the machine’s second-year depreciation and year end book value under the straight-line method.
Answer
Save your money | / | A useful life | = | Depreciation expense |
80,800 | / | 20 | = | 4040 |
.
Year 2 Depreciation | 4040 |
Year end book value Year 2 (86,800) – (4040*2) | 78,720 |
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