Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $84,600. The machine's useful life is estimated at 20 years, or 393,000 units of product, with a $6,000 salvage value. During its second year, the machine produces 33,300 units of product. Determine the machine's second-year depreciation using the double-declining-balance method. First year's depreciation Second year's depreciation Double-declining-balance Depreciation Choose Factors: Choose Factor (%) Annual Depreciation Expense = Depreciation expense =
Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $84,600. The machine's useful life is estimated at 20 years, or 393,000 units of product, with a $6,000 salvage value. During its second year, the machine produces 33,300 units of product. Determine the machine's second-year depreciation using the double-declining-balance method. First year's depreciation Second year's depreciation Double-declining-balance Depreciation Choose Factors: Choose Factor (%) Annual Depreciation Expense = Depreciation expense =
Chapter1: Financial Statements And Business Decisions
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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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Transcribed Image Text:Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of
$84,600. The machine's useful life is estimated at 20 years, or 393,000 units of product, with a $6,000 salvage value.
During its second year, the machine produces 33,300 units of product.
Determine the machine's second-year depreciation using the double-declining-balance method.
First year's depreciation
Second year's depreciation
Double-declining-balance Depreciation
Choose Factors:
X X X
Choose Factor (%)
Annual Depreciation
Expense
= Depreciation expense
=
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