Question

Remoras company installs a computerized manufacturing machine and it's factory at the beginning of the year at a cost of $45,700 the machines useful life is estimated at 10 years or 397,000 units of product with a $6000 salvage value during his second year the machine produces 33,700 units of product determine the machine

- second year depreciation in your in book value under the straight-line method.

Answer 1

Cost of Machine = $45,700

No. of Useful Life = 10 years

Salvage Value = $6,000

Depreciation = (Cost of Machine – Salvage Value) / No. of Useful Life
Depreciation = ($45,700 - $6,000) / 10
Depreciation = $39,700 /10
Depreciation = $3,970

Depreciation, First Year = $3,970

Depreciation, Second Year = $3,970

Book Value, First Year = $45,700 - $3,970
Book Value, First Year = $41,730

Book Value, Second Year = $41,730 - $3,970
Book Value, Second Year = $37,760