11-28-2004, 04:46 AM
Hi Problem creater..... here the answer to ur problem
1.
We treat capital as a liability because it's a liability of the business but if u see it on the other side( let's suppose u invest the money in the business) then it will be ur asset but it will be a business's liability...Hope it will work out.
2.
Who told you that there are only two methods of depreciation. There are so many methods like machine hour rate, sinking fund method, annunity method and many more, but most commonly used are straight line and reducing balance method.
3.
As far as this question is concerned .... it's very interesting issue but i think it won't be capitalised as it doesn't really increase the capacity of the machine (celerity)). It will just maintain her source of ince.
I m also waiting for someone's comments to know whether my answer is right or not.
1.
We treat capital as a liability because it's a liability of the business but if u see it on the other side( let's suppose u invest the money in the business) then it will be ur asset but it will be a business's liability...Hope it will work out.
2.
Who told you that there are only two methods of depreciation. There are so many methods like machine hour rate, sinking fund method, annunity method and many more, but most commonly used are straight line and reducing balance method.
3.
As far as this question is concerned .... it's very interesting issue but i think it won't be capitalised as it doesn't really increase the capacity of the machine (celerity)). It will just maintain her source of ince.
I m also waiting for someone's comments to know whether my answer is right or not.