Answer:
Results are below.
Explanation:
Giving the following formula:
Purchase price= $1,800,000
Salvage value= $60,000
Useful life= 8 years or 600,000 units
<u>To calculate the annual depreciation using the units-of-production method, we need to use the following formula:</u>
Annual depreciation= [(original cost - salvage value)/useful life of production in units]*units produced
Annual depreciation= [(1,800,000 - 60,000) / 600,000]*70,000
Annual depreciation= $203,000
<u>To calculate the annual depreciation using the double-declining balance, we need to use the following formula:</u>
<u></u>
Annual depreciation= 2*[(book value)/estimated life (years)]
Annual depreciation= 2*[(1,800,000 - 60,000) / 8]
Annual depreciation= $435,000
<u>Finally, the annual depreciation using the straight-line method:</u>
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (1,800,000 - 60,000) / 8
Annual depreciation= $217,500
