Ramirez Company installs a computerized manufacturing machine in its factory at the beginning

Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $76,800. The machine’s useful life is estimated at 10 years, or 257,000 units of product, with a $10,900 salvage value. During its second year, the machine produces 24,400 units of product.

Determine the machine’s second-year depreciation and year end book value under the straight-line method.

Explanation:

Straight-line

($76,800 – $10,900) / 10 years = $6,590