POSSIBLE PROCEDURES IN FIXING RATES 1 3 
The amount available for amortization at the end of the fifth 
year is shown by this account to be $23.12 for each $100 of 
original investment and $21.11 at the end of the tenth year. 
J. The amortization and replacement account in the case of 
the Straight Line Method (5-year probable life) would show the 
following: 
Dr. side of Ledger Cr. side of Ledger 
1st yr. To allowance for amort. and repl. $20.00 By renewals $4.00 
2nd yr. To allowance for amort. and repl. 20.00 By renewals 8.16 
ard yr. To allowance for amort. and repl. 20.00 By renewals 12.635 
4th yr. To allowance for amort. and repl. 20.00 By renewals 17.64 
sth yr. To allowance for amort. and repl 20.00 By renewals 23.34 
Sub-Totals $100.00 $05. 79 
Balance 34.21 
By Balance $34.21 
6th yr. To allowance for amort. and repl. 20.00 By renewals $21.97 
7th yr. To allowance for amort. and repl. 20.00 By renewals 21.16 
8th yr. To allowance for amort. and repl. 20.00 By renewals 20.54 
oth yr. To allowance for amort. and repl. 20.00 By renewals 19.73 
1oth yr. To allowance for amort. and repl. 20.00 By renewals _ 18.31 
Totals $134.21 $101. 71 
Balance __ 32.50 
These figures show that at the end of the fifth year about 34 
per cent of the total cost of the depreciating articles would have 
been returned to the owner and at the end of the tenth year 
about 32.5 per cent. The remaining investment at 3 years 
would have been about 66 per cent and at the end of the tenth 
year about 67.5 per cent. 
g. The replacement account in the case of the Unlimited 
Life Method would show the following: 
Dr. side of Ledger Cr. side of Ledger 
1st yr. To allowance for repl. $4.00 By renewals $4.00 
2nd yr. To allowance for repl. 8.16 By renewals 8.16 
3rd yr. To allowance for repl. 12.65 By renewals 12.65 
4th yr. To allowance for repl. 17.64 By renewals 17.64 
sth yr. To allowance for repl. 23.34 By renewals 23.34 
6th yr. To allowance for repl. 21.97 By renewals 21.97 
7th yr. To allowance for repl. 21.16 By renewals 21.16 
8th yr. To allowance for repl. 20.54 By renewals 20.54 
oth yr. To allowance for repl. 19.73 By renewals 19.73 
roth yr. To allowance for repl. 18.31 By renewals 18.31 
HC