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1. What is the best method to use when depreciating land? 2. List the costs that...

1. What is the best method to use when depreciating land?

2. List the costs that are included in machinery.

3. Explain double-declining balance?

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Answer #1

1.LAND IS A NON DEPRECIABLE ASSET BUT IN EXCEPTIONAL CASE IT IS DEPRECIATED,WHEN NATURAL RESOURCE ON LAND START DIMINISHING. SO DEPLETION METHOD OF DEPRECIATION TO BE CONSIDERED AS BEST METHOD OF DEPRECIATION FOR LAND

2.COST INCLUDED IN MACHINERY

-INSTALLATION COST

-TRIAL RUN COST

-FREIGHT

3.DOUBLE DECLINING BALANCE METHOD

IT IS AN ACCELERATED DEPRECIATION METHOD BY MULTIPLYING THE ASSET'S VALUE BY DEPRECIATION RATE.

DEPRECIATION RATE=STRAIGHT LINE RATE*2

UNDER THIS METHOD DEPRECIATION CHARGED IN EARLIER YEARS IS HIGHER, AND THEN DEPRECIATION STARTS DECLINING THAT IS WHY IT IS KNOWN AS DECLINING BALANCE METHOD.

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