Your question:

Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $43,500. The machine’s useful life is estimated at 10 years, or 385,000 units of product, with a $5,000 salvage value. During its second year, the machine produces 32,500 units of product. Determine the machine’s second-year depreciation using the double-declining-balance method.

Assignment Help Answers with Step-by-Step Explanation:

To calculate the second-year depreciation using the double-declining-balance (DDB) method, you'll follow these steps:

The straight-line depreciation rate is calculated using the following formula:

Straight-line depreciation rate = 1 / Useful life

DDB Depreciation = (Book Value at the Beginning of the Year) x (Double the Straight-line Rate)

Now, let's calculate the DDB depreciation for the second year:

To find the accumulated depreciation at the end of the first year, we'll apply the straight-line depreciation for the first year:

Straight-line depreciation for the first year = (Cost - Salvage Value) / Useful life

DDB Depreciation = ($43,500 - $3,850) x 20%

DDB Depreciation = $39,650 x 0.20