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 $45,900. The machine's useful life is estimated at 10 years, or 389,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 32,900 units of product. etermine the machine's second-year depreciation and year end book value under the straight-line method. Choose Numerator: Cost minus salvage 5 ✓1 38,900 / Year 2 Depreciation Year end book value (Year 2) Answer is complete but not entirely correct. Straight-Line Depreciation Choose Denominator: Estimated useful life (years) $ $ = 10✔ = Annual Depreciation Expense Depreciation expense $ 3,890 3,890 42,010 X
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 $45,900. The machine's useful life is estimated at 10 years, or 389,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 32,900 units of product. etermine the machine's second-year depreciation and year end book value under the straight-line method. Choose Numerator: Cost minus salvage 5 ✓1 38,900 / Year 2 Depreciation Year end book value (Year 2) Answer is complete but not entirely correct. Straight-Line Depreciation Choose Denominator: Estimated useful life (years) $ $ = 10✔ = Annual Depreciation Expense Depreciation expense $ 3,890 3,890 42,010 X
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter18: Accounting For Long-term Assets
Section: Chapter Questions
Problem 4CE: Grandorf Company replaced the engine in a truck for 8,000 and expects the new engine will extend the...
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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