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Question

" In case of a long term asset, repair and maintenance expenses are expected to rise in later years than in earlier year".
Which method, is suitable for charging depreciation if the management does not want to increase burden on profits and loss account of depreciation and repair.

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Solution

The written down value method is most appropriate to overcome the burden of the profit and loss account because of high depreciation and repair costs over the years of the asset.

The cost of depreciation reduces and the repair and maintenance expenses increase over the years. However, the entire burden will not get ease to the management.

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