The info: 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
Can you explain how I would make a depreciation schedule using the double declining method? Not sure how to calculate the depreciation value, accumulated depreciation, and book value.