Charlie Parker, president of Spinners Company, has recently noted that depreciation increases cash…


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Charlie Parker, president of Spinners Company, has recently noted that depreciation increases cash… 1 answer below » 1. Under what conditions is it appropriate for a business to use the composite method of depreciation for its plant assets? What are the advantages and disadvantages of this method? 2. If Remmers, Inc. uses the composite method and its composite rate is 7.5% per year, what entry should it make when plant assets that originally cost $50,000 and have been used for 10 years are sold for $14,000? 3. A building that was purchased December 31, 1988, for $2,500,000 was originally estimated to have a life of 50 years with no salvage value at the end of that time. Depreciation has been recorded View complete question » 1. Under what conditions is it appropriate for a business to use the composite method of depreciation for its plant assets? What are the advantages and disadvantages of this method? 2. If Remmers, Inc. uses the composite method and its composite rate is 7.5% per year, what entry should it make when plant assets that originally cost $50,000 and have been used for 10 years are sold for $14,000? 3. A building that was purchased December 31, 1988, for $2,500,000 was originally estimated to have a life of 50 years with no salvage value at the end of that time. Depreciation has been recorded through 2012. During 2013, an examination of the building by an engineering firm discloses that its estimated useful life is 15 years after 2012. What should be the amount of depreciation for 2013? 4. Charlie Parker, president of Spinners Company, has recently noted that depreciation increases cash provided by operations and therefore depreciation is a good source of funds. Do you agree? Discuss. 5. Andrea Torbert purchased a computer for $8,000 on July 1, 2012. She intends to depreciate it over 4 years using the double-declining-balance method. Salvage value is $1,000. Compute depreciation for 2013. View less » Jul 18 2014 01:00 PM

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