Your client Burley Designs recently acquired a new machine to build bicycle wheels for thetandems recumbents and trailers they build.Total machine cost after installation calibrations and other related capitalized costs was $18250.The machine has an expected life of 7 years with a residual value of $2000. The machine iscapable of producing 20000 wheels per year. Burley estimates that they will only ask the machineto produce as follows:Year Anticipated Product Schedule Wheels1 135002 142503 150004 162005 170006 180007 19100Required:1. Prepare and present depreciation schedules for the machine. Use straight line units ofproduction and the double declining balance methods of depreciation.2. For each method make a brief explanation of how the schedules were determined.3. Discuss an advantage and disadvantage of each method.4. Recommend a particular depreciation method for Burley to use and support yourrecommendation with reasoning.5. Remember that your audience is professional but not accountants.6. Upload your memo and depreciation schedules to moodle in Week 6 at the link provided.Tips:1. All schedules and your memo should be prepared on the computer (no handwritten work).You may imbed your excel schedules into a Word file if you prefer.2. Your memo should follow proper memo formatting (see the example in moodle).3. Your memo should be written in full sentences as though you expect it to be read by areasonably astute business user.4. Proofread your work before turning it in!
