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The certified public accountant is frequently called upon by management for advice regarding methods of computing depreciation. Of comparable importance, although it arises less frequently, is the question of whether the depreciation method should be based on consideration of the assets as units, as a group, or as having a composite life. Instructions a.   Briefly describe the depreciation methods based on treating assets as (1) units and (2) a group or as having a composite life. b.   Present the arguments for and against the use of each of the two methods. c.   Describe how retirements are recorded under each of the two methods.

The certified public accountant is frequently called upon by management for advice regarding methods of computing depreciation. Of comparable importance, although it arises less frequently, is the question of whether the depreciation method should be based on consideration of the assets as units, as a group, or as having a composite life. Instructions a.   Briefly describe the depreciation methods based on treating assets as (1) units and (2) a group or as having a composite life. b.   Present the arguments for and against the use of each of the two methods. c.   Describe how retirements are recorded under each of the two methods.

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 4C: Depreciation continues to be one of the most controversial, difficult, and important problem areas...
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The certified public accountant is frequently called upon by management for advice regarding methods of computing depreciation. Of comparable importance, although it arises less frequently, is the question of whether the depreciation method should be based on consideration of the assets as units, as a group, or as having a composite life.

Instructions

a.   Briefly describe the depreciation methods based on treating assets as (1) units and (2) a group or as having a composite life.

b.   Present the arguments for and against the use of each of the two methods.

c.   Describe how retirements are recorded under each of the two methods.

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