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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
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 dollar 18,250. The machine has an expected life of 7 years with a residual value of dollar 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: Required: Prepare and present depreciation schedules for the machine. Use straight line, units of production and the double declining methods of depreciation. For each method make a brief explanation of how the schedules were determined. Discuss an advantage and disadvantage of each method. Recommend a particular depreciation method for Burley to use and support your recommendation with reasoning. Remember that your audience is professional, but not accountants
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