Plant properties and equipment are stated at cost less

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Plant, properties, and equipment are stated at cost less accumulated depreciation. Expenditures for betterments are capitalized, whereas normal repairs and maintenance are expensed as incurred. The units-of-production method of depreciation is used for major pulp and paper mills, and the straight line method is used for other plants and equipment.Annual straight-line depreciation rates are, for buildings-2½ percent to 8½percent, and for machinery andequipment-5percent to 33 percent.

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a. Are the depreciation methods used in the company's financial statements determined by current income tax laws? If not, who is responsible for selecting these methods? Explain.

Reference no: EM13589352

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