the following information applies to the questions displayed below. ramirez company installs a computerized…

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 $83,600. the machines useful life is estimated at 20 years, or 398,000 units of product, with a $4,000 salvage value. during its second year, the machine produces 33,800 units of product. exercise 10 - 4 (algo) straight - line depreciation lo p1 determine the machines second - year depreciation and year end book value under the straight - line method. straight - line depreciation choose numerator / choose denominator = answer / = depreciation expense / = year 2 depreciation year end book value (year 2)

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 $83,600. the machines useful life is estimated at 20 years, or 398,000 units of product, with a $4,000 salvage value. during its second year, the machine produces 33,800 units of product. exercise 10 - 4 (algo) straight - line depreciation lo p1 determine the machines second - year depreciation and year end book value under the straight - line method. straight - line depreciation choose numerator / choose denominator = answer / = depreciation expense / = year 2 depreciation year end book value (year 2)

Answer

Explanation:

Step1: Calculate depreciable cost

Depreciable cost = Cost - Salvage value. So, $83600 - 4000=79600$.

Step2: Calculate annual depreciation

Annual depreciation = Depreciable cost / Useful - life in years. So, $\frac{79600}{20}=3980$. In straight - line method, annual depreciation is constant, so second - year depreciation is also $3980$.

Step3: Calculate year - end book value (Year 2)

Book value = Cost-(Annual depreciation×Number of years). So, $83600-(3980\times2)=83600 - 7960 = 75640$.

Answer:

Choose Numerator / Choose Denominator = Answer
$79600$ / $20$ = $3980$ (Depreciation expense)
N/A / N/A = N/A
Year 2 Depreciation $3980$
Year end book value (Year 2) $75640$