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

the following information applies to the questions displayed below.\nramirez company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $84,600. the machines 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.\ndetermine the machines second - year depreciation using the double - declining - balance method.\ndouble - declining - balance depreciation\nfirst years depreciation\nsecond years depreciation\nchoose factors:\n×\nchoose factor(%)\n=\nannual depreciation expense\n×\n=\ndepreciation expense\n×\n=\n×\n=\nbeginning book value\ncost\ncost minus salvage

the following information applies to the questions displayed below.\nramirez company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $84,600. the machines 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.\ndetermine the machines second - year depreciation using the double - declining - balance method.\ndouble - declining - balance depreciation\nfirst years depreciation\nsecond years depreciation\nchoose factors:\n×\nchoose factor(%)\n=\nannual depreciation expense\n×\n=\ndepreciation expense\n×\n=\n×\n=\nbeginning book value\ncost\ncost minus salvage

Answer

Explanation:

Step1: Determine straight-line depreciation rate

$\text{Straight-line rate} = \frac{1}{20} = 5%$

Step2: Calculate double-declining balance rate

$\text{Double-declining rate} = 2 \times 5% = 10%$

Step3: Compute first-year depreciation

$\text{First-year depreciation} = $84,600 \times 10% = $8,460$

Step4: Find book value at end of first year

$\text{Book value after first year} = $84,600 - $8,460 = $76,140$

Step5: Calculate second-year depreciation

$\text{Second-year depreciation} = $76,140 \times 10% = $7,614$

Answer:

$7,614$