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Memo To: From: Topic: Due Date: Audience: BA 211 Students Instructor Depreciation Memo First Class Day, Week 6 Burley Designs Your client, Burley Designs, recently acquired a new machine to build bicycle wheels for the tandems, recumbents and trailers they build. Total machine cost after installation, calibrations and other related capitalized costs was $18,250. The machine has an expected life of 7 years with a residual value of $2000. The machine is capable of producing 20,000 wheels per year. Burley estimates that they will only ask the machine to produce as follows: Year 1 2 3 4 5 6 Anticipated Product Schedule - Wheels 13,500 14,250 15,000 16,200 17,000 18,000 19,100 7 Required: 1. Prepare and present depreciation schedules for the machine. Use straight line, units of ( production and the double declining 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 your recommendation with reasoning. 5. Remember that your audience is professional, but not accountants. Focus Recommendation Straight-Line Year Depreciation Expense Accumulated Depreciation Book Value 1 2 3 4 5 6 7 Advantages: Disadvantages: I Units of Production Year Depreciation Expense Accumulated Depreciation Book Value 1 2 3 4 5 6 7 Advantages: Disadvantages: Double Declining Year Depreciation Expense Accumulated Depreciation Book Value 1 2 3 4 5 I 6 7 Advantages: Disadvantages