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Earth Lovers, Inc., the world's largest producer of environmentally-friendly products and services, purchased a new tree hugging machine. The cost was $2,500,000. The estimated life
Earth Lovers, Inc., the world's largest producer of environmentally-friendly products and services, purchased a new tree hugging machine. The cost was $2,500,000. The estimated life in years is 10 . Estimated life in units of production is 1,000,00g hugs. Estimated residual(salvage) value at the end of its useful 11 fre 15$2000 Assuming the company uses straight-line depreciation, what will be the annual amount of depreciation expense? 248,000102500,00020,000 Assuming the company uses units of production depreciation based on number of hugs, how much depreciation expense will be incurred in years 1 through 3 if production is estimated to be 120,000 hugs, 100,000 hugs, and 90,000 hugs in years 1,2 , and 3 , respectively? 297,000 Year 1 (1) 10000002500,00020,000=2,48 1009000 (2) 2.48120000=297,000 Year 2,248,v00 Year 3.223 .200 Assuming the company uses the double declining balance method of depreciation, how much depreciation expense will be incurred in years 1,2 , and 3 ? Year 1 Begining Book value Acumblaredopredian 2500000102500000500,000 Year 2 BV: 20000000000x2/10=40000. ADi q00, uno Year 3 25000002/10 BV :160,000
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