6 for what reasons are plant assets retired define

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adjust value of fixed assets on a periodical basis. 6. For what reasons are plant assets retired? Define inadequacy, supersession, and obsolescence. People is retired by physical or economic factors. Inadequacy: no enough; Supersession: passed time, for example, it is due today, but you submit the homework tomorrow, that is passed time. Obsolescence: change old thing from new. For example, 1988s had product but they are old. 10. What are the major factors considered in determining what depreciation method to use? That are four major factors considered included depreciation expense, cost of asset, and estimated salvage value of assets.
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11. 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? The composite method is appropriate for a company which owns a large number of heterogeneous plant assets. I think it is not appropriate for a business to use the composite method. Advantage: it is not necessary to keep detailed records for each plant asset in the group. Disadvantage: the book value of plant assets no reflect proper carrying value of assets. 22. List (a) the similarities and (b) the differences in the accounting treatments of depreciation and cost depletion. Similarities: 1. Estimated life is based on economic or productive life. 2. Past accumulated charges to operations in deducted from original cost of asset on balance sheet. 3. Residual value is properly recognized in computing the charge to operations. Difference: 1. Depletion applies to natural resources while depreciation applies to plant and equipment. 2. Depletion is almost always based on output whereas depreciation is usually based on time. 3. Computation of depletion rate is less precise than commutation of depreciation rates.
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