study after checking from their experience elsewhere. It seemed that the experience of these experts would have carried great weight with the Court. However, the Court decided for the Portland General Electrie Company by stating that useful life is to be measured by experience of the business in which the property is used. Methods of Calculation of Depreciation There are numerous methods of computing depreciation of fixed tangible assets. ‘The method selected will depend on circumstances and the kind of asset. It must be remembered that once the method is selected, it should be applied consistently from one accounting period to another so as to give a true and fair view of the financial standing of the concerns. Two methods which are most commonly employed in the sphere of commerce and industry are discussed as follo’ 1. The Straight-line or Fixed Instalment Method Under this system, an instalment or fixed proportion of the original capital outlay is provided equally in each accounting period. The value of the asset is reduced year by year to its scrap value (if any) at the end of the useful life. The fixed amount is then charged to the revenue account. For an example: The cost price of a machine which is estimated to have a useful life of 10 years is $8,000. The cost price divided by the number of years will give the amount of depreciation to be written off in the accounting period. That is, under the Straight-line Method, the annual depreciation is $800. If there is a scrap value, it should be taken into account. Assuming the scrap value is estimated to be $500, then the total loss by depreciation is $7,500. Annual loss is $750. Some authorities criticized the Straight-line Method by stating that the amount of depreciation should be charged against income heavily in the closing stages of the useful life instead of providing equal amount of depreciation over the periods. More- over, some assets, such as motor vehicles, on the contrary, depreciate heavily in the earlier years. All this can be levelled out when there are a number of assets bought in different years, as what is undercharged on the one is overcharged on the other. Owing to the simplicity of the system, most people prefer the Straight-line Method than the other methods. 2. The Reducing Balance Method The computation of this method is entirely based on a fixed percentage of the book value of the asset as reduced by previous provisions. This method tends to give a fairly even charge against income every year. On the one hand, the depreciation of fixed assets is heavier in the early periods while the repairs and maintenance are lightest. On the other hand, the lighter burden by way of depreciation falls in the closing stages of the useful life, when repairs and maintenance are heaviest. To take an example: The cost price of a machine is $1,000. It assumes that depreciation at 10% is to he written off. 93Cost Price = - = - - - - - = - — $1,000 ist Year: Less Depreciation at 10% - - - — - 100 $ 900 2nd Year: Less Depreciation at 10% - + 90 $ 810 rd Year: Less Depreciation at 10% - - - - 81 $ 729 And so on. Whichever method discussed above is adopted, the ledger entries will be debited ty a Depreciation Account, the balance of which is transferred in due course to the debit of Profit and Loss Account. ‘The credit entry is made in the Asset Account or Provision for Depreciation. It is preferable to credit the latter because the Balance Sheet of a limited company is required to show fixed assets at cost less the aggregate amount provided for depreciation. ‘The interested parties, such as shareholders, can base their opinions on the information given in the Balance Sheet as regarding the adequacy of the Provision for Depreciation. If the amount of depreciation is credited to the Asset Account, the cost of the Asset is reduced year by year until it is lost sight of. In consequence, the origina) cost is obscured. The methods or depreciation thus far discussed are fundamental. There are many others too numerous to describe in full but important enough to mention in a list as follows: — (® Annuity System, (b) Renewals Reserve. (©) Valuation Method. (d) Sinking Fund Method. (ce) Produetion Unit Method. . (f) Insurance Policy Method (yg) Sum of Years’ Digits Method. Conclusion To sum up, depreciation is a charge against income. There is always a loss in value of the assets, such as plant and machinery, in operation or even they are lying idle although our scheme of repairs and maintenance may be scrupulously framed. Since the useful life of the plant capacity is lunger than the accounting period, a periodic charge is made for depreciation to systematically apportion the cost of plant consumed over its useful life in order that there may be matching of costs with the revenues in determining and reporting upon the financial results of operation for the accounting period. Besides, the meaning of the word ‘depreciation’ has to be made clear when using in order to avoid failure in communication between the interested parties. Up to the present time, depreciation is still one of the controversial subjects in the field of accounting. There is no rule of thumb formula which properly can be applied to all circumstances, but rather must be tailor-made to fit each particular concern. 94ae te] Bae cae stave civ TALKS ON INSURANCE HERR SAE + OR AE BRAS FR HRA PSUs PORN RL ABL ARAZ OE AN EER» BIE ZW > I RIS MERE AAS EE» NSD Ss RRS » DCE AE RE A (=) tbe RAE TF ce PR UAEA © ot So + ARPT BS © RIA H ch > AF OOABAR + 38 BL BROKE AS (268 (Insuronce) > ATL» SULIT ATS RAS MAR OL TILE APHBIBE © PR Bie ARE SAS ABI E> Re Ra oR EE A: 7K HR (Marine Insurance) tb 1 + ARRAS + RCA» OL » Fy AN Bea iT EER» ene ea be RIEL EZ BE o pee iB Nieaeeeee ’ + BHR i MR LI , en ean 9 BR RSA EB TRIB + RRZ ae cM » HMMA GE» PRR: aa 3 hs RAM RAG ARS RA RN AB ADM RE PB CH + I BARE 0 © RFORP HS (=) RRR: RMB RESO ARR o BARTZ RIA KEL » Bt FEAR IR (Property Insurance) + i WR( Burglary Insurance) » :k (Fire Insurance) > NHR ER BR (Automobile Insurance) » i E485 (Marine Insuronce) » £8 GR (Agricultural Insurance) Sie PRM AE MAUR + EEA BIMEHE + AGERBR(Life Insurance) < AS RHR NR Per- sonal Accident Insurance) » fi Lihil &26&(Workmen’s Compensation Insurance ) 4: 3 08 fz » (Insurance for Unemployment) iit @ 68 B® > (Social Insurance } + SORRSARE SHS Ree MLO: » ABUSE Z HERE ° RIA BRE Te ac RBA © BRR REA BEML eS Hie > CEPR BAL RE AMS RE > SESE AEA eee 95ZH VKH ARERIABRRRM LES HRA UR-BRES ERA QRERPEEBRARRELRE BRKRG CRILGRRME > MUA RR BRE BARAT SREMM ZED BPRS KAMEN AMA AM RRA MIR > BOR ALT IA 2 SE FE © CS) ARPES ZZ Me + PROB 22 BEARER ALE & AA A.M AQ: ROR BIER EA mE aL» Tee CARRE) Re + HRP 5 CSCS ALOR PRE NRA + LAG PR EE ATA BLT + PRA PRO OE CE RRR A a eS HARZRR HAGCHLA R KABREBER CME —-ME NT ese RS > PEDERSEN SK» AA ZR o BREE: RERACHKERZIED: ABER EREEBS > BATE > BA + ARGS RIG » FR TBR» HARB RAR SER AR + VaOTOR A ERE © CRMLG ROARS EREBRS EBLE» REGRET AS RR + FEMRAZ © CFL) RIEL + BT AEA PRL CRETE UEME » NOME Se i » SUP ER es FUBEES ZA MERA EREROZRRRMARA s HARE BINR SL REARAA AM e HARNCM AMZ AR » ARB RS | 2 RRR EE ° PREG SONAR A AA Ho C2) fie AR AE RNG RAM KARATE RNY BI » UAC SURIERE AT Fem ¢ A. tgs eI Tak (ROG DS) 47 0-H AK HH Poo! ) » CSE AK i IR setts Cth ) MZ REREAD BTTRARARPHRM: ARSREM READ GLRS RAAT ARRORBE » Be HAIER > BER > AEC RETR Ko AMARA » SRE K+ TARGA MARS RRE PARAWR AT SAS ALAA > TEE DUE AUSSI SED SAR NTE ER » ARR teh ih Rs BEARS BB © B. MRE ERS ASB BAER + FUER RA TIES K RIG DLE 1 BS eH EA ER» EL ZRATAZARAE AERA > RARE BORN CASS MMR 3 A RARBZIR > KORAAGHIENS Ci RS RA ERR AMI Z IA» ina PUR > CATE TRI » TTS TRE + IRS + RA eRe BS RR ARETERM © C. PRR LA Bie ROE PROG ARES ABA TPT LOR» DZS I eH 1G EZ PRB MN AE ERE > HB APSRELRE s MARTA MAMELMA KE RBERAMRD MUA » HE WA» BRE» ER» ASE ARTY MCAS RAT » BMI MAS + AA BEE SURE HREE » RECR SERN © Baik + FRARA TAREE A OK + KES 5 ARIS BE RRR REA © 96PRLARS + BAR PRG » an VK + J PRAIA, Rae 48 0 BYE + fen Tr > Sil Same + Rath Ch) LA BHE ATER + BLA BC + Beit wm neers Resets SEER + BBE RZ HK + CHESS (9) ak ab , HRB A Ae RABR (One. for ‘il, call for rns) FEZ AA ©A Brie} Talk on Traneportation, INTRODUCTION Localities and regions are variously endowed with natural resources, climate, arts and skill. Therefore the products of economic activity among communities differ. Under these different circumstances, the growth of trade had been stimulated. ‘The natural hindrance to trade between geographical points is the time and cost of both moving the persons and the property across the space and the natural obstruction which separate them and also partly due to various desire of the primitive people in obtaining large variety of goods including natural resources or products being made which did not happen in one spot. So gradually they realized that transportation is essential and should be made into appearance in order to achieve these objectives. MEANING OF TRANSPORTATION Briefly speaking, transportation is simply the movement of persons or property from one place to another. It is the function of carriage or conveyance which is equally vital to primitive and civilized people. Whereas in economic point of view, transportation is considered as a part of production for it creates place utility, and sometimes it also creates time utility in goods when storages are en route to the market. As a matter of fact every kind of transportation normally includes three mechanical elements, namely (1) the vehicle (2) the motive power and (3) the way. The way in medern transportation has been improved such as railway, waterway or airway which requires substantial capital investment. In olden transportation, it might be only an ordinary path. DEVELOPMENT OF TRANSPORTATION Formerly, transportation among primitive people was the use of animals such as horses, donkeys, camels, etc. which were used to carry both persons and property. Later on a floating log was used to convey goods across or down streams. Slowly raft was made and then from raft they developed into canoes and so on. When civil- izatoin advances transportation becomes more and more progressive. Better vehicles, improved way, iarger and better sailing vessels, highways and canals had been developed and constructed, but methods of transportation remained comparatively crude until the eighteenth and nineteenth centuries. The appearance of large steam vessels with steel hulls furthered the progress of trade by water. After steam engine had been invented, steam power was also used to land transportation and the railroads were born. By 98and by railway systems had been expanded rapidly in many countries and so were highways, airways, and seaways. As a result of the development and improvement of transportation from prehistoric times to the present, much of the enterprise and the ingenuity of man have been commanded and the scope of international trade of ali countries has also been improved and expanded widely. THE IMPORTANCE OF TRANSPOR’ ‘Transportation and economic The features of modern commercial and industrial society are large le production and mass exchange. No matter what kind a country or a territory is, the economic development must first depend upon the help of the transportation. In the absence of transportation, natural resources though found cannot be transferred and made into finished goods. Consequently, the commerce, the industry and the prosperity of a country will be greatly affected. ‘Transportation and_large ale_production When transportation has been improved, ib makes possible the accumulation of the large quantities of raw materials without which modern large seale production could not function efficiently, Many basic raw materials of industry are located in sparsely settled areas and must be shipped long distances to factories or primary markets located in or near the great centers of population. Large scale production could not possibly exist without some means of transporting raw materials cheaply, quickly and in large quantities to manufacturing areas. When raw materials adequately supplied to production, the size of the market for the products becomes wider and wider gradually. In United States, both the standard of living of her people and her civil- ization had advanced highly, these, no doubt, are due to her ability to produce enormous volume and variety of low priced goods and services through the aid of improved transportation ‘Transportation a nd_geographical specialization With low cost movement of both the large quantities of raw materials from source of supply to factory and the finished products to a wide market area, improved transportation enables individual plants to achieve the economy of specialization and the division of labours. It is true that certain countries are able to produce certain thing which cannot be manufactured in other countries. Sometimes people of differen: countries exchange their surplus products for one another in order that all may have the things they want or need by way of improved transportation. If the surplus products cannot be transported safely from one country to another or if transportation costs are high, then it is not worth to specialize on a geographical basis. In brief, geographical specialization depends entirely upon the availability of efficient and economical improved transportation. 99‘Transportation and rent_valu Land rent varies with the degree of its usefulness. In case of agricultural, mineral and forest land, productivity depends partiy upon its natural qualities and partly upon its location with reference to markets or centers of population. Lands which are far away from town possess little values or sometimes even no value at all. Though they can produce profitable products, they are far away from the market and the cost of transporting their products to the market is very high. With improved transportation, the values of these remote lands may be increased. In case of urban land, rental value depends largely upon location but improved transportation also play a part here. ys ‘Transportation and social welfare Transportation makes possible the large scale production which indirectly gives rise to great possibilities of improving social well being due to the easiness of procur- ring variety of goods such as fresh fruits, bananas, coffee, rubber and tins which would help to enrich the general living standard of the society. ‘Transportation _and international trade, Transportation is the bridge between local country and foreign countries. When transportation is improved, the cost of transporting raw materials from other regions into a local country is cheap as compared with the crude transportation. Then it would b efitable for the manufacturers to produce large quantity of products with low costs to meet various demands of both the local and foreign people. As a result, low cost goods enlarge their markets in the foreign countries and can compete with goods in foreign markets. Indirectly it helps the economy of a country to accumulate more income and increase the necessity of cooperation among nations in commercial, political and cultural matters. CONCLUSION In a word, improvement of transportation greatly venefits religious, educational and social life respectively. People living in the remote areas can readily come not to nearby towns but also to distant cities. They can share the recreational and cultural advantages of the urban centers such as movies, television, ete. Standards of ing, fashion of clothing, quality of food a transportation service. 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