Straight-line and units-of-production depreciation

1. What is the carrying value of an asset?

2. Explain the difference between straight-line and units-of-production depreciation.

3. Explain how to calculate the rate used in double-declining-balance depreciation.

4. What is the midyear convention and why do companies use it?

1. What factors do companies consider in determining the cost of plant assets?

2. Distinguish between capital and revenue expenditures.

3. Should the cost of paving a parking lot be treated as a capital or revenue expenditure? Why?

Solution: