ANSWERS TO QUESTIONS
No gain or loss is recognized under the composite method. Depreciation to January 1, 2007: $48,000 X 24 = $1,152,000. 14. No, depreciation does not provide cash; revenues do. The funds for the replacement of the assets come from the revenues; without the revenues no income materializes and no cash inflow results. A separate decision must be made by management to set aside cash to accumulate ... ................
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