A recent annual report for The Coca-Cola Company contained the following note:

Required: 1. What is the range of expected lives for buildings and improvements? 2. Explain why Coca-Cola depreciates the cost of its containers instead of including the total in cost of goods sold in the year the product is sold.

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Property, plant, and equipment is stated at cost, less allowance for depreciation. Depreciation expense is determined principally by the straight-line method. The annual rates of depreciation are 2 percent to 10 percent for buildings and improvements and 7 percent to 34 percent for machinery, equipment, and containers.