Earth Lovers, Inc., the worlds 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 1,000,000 hugs.

Estimated residual(salvage) value at the end of its useful life is $20,000.

Assuming the company uses straight-line depreciation, what will be the annual amount

of depreciation expense?________________

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?

Year 1_________________

Year 2_________________

Year 3_________________

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_________________

Year 2_________________

Year 3_________________