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Question -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
Anticipated Product Schedule - Wheels
1
13,500
2
14,250
3
15,000
4
16,200
5
17,000
6
18,000
7
19,100
Required: Prepare and present depreciation schedules for the machine. Use the double declining methods of depreciation.
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