Prepare and present depreciation schedules for the machine

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 $2,000. 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:

1. Prepare and present depreciation schedules for the machine. Use straight line, units of production 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 your recommendation 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.

Answer 1

Need the questions of the Accounting to be completed. Consider any organization of your choice and use its facts and figures to answer the following question: Q1. Make and present the depreciation schedules for the machine. Make use of straight line, units of production and the double declining balance process of depreciation. Q2. For each process make a brief description of how the schedules were find out. Q3. Describe a benefit and drawback of each method. Q4. Propose a specific depreciation method for Burley to make use of and support your proposal with reasoning.