Question

In: Accounting

You have purchased $320,000 of computer equipment that is in a CCA Class 10 (Canada Revenue...

You have purchased $320,000 of computer equipment that is in a CCA Class 10 (Canada Revenue Agency). Using the half-in-first-year rule, how much depreciation would occur in year 3?

Solutions

Expert Solution

Applicable depreciation rate will be 30% for class 10.

Year Opening Value
(UCC)		 Depreciation Ending Value (UCC)
1               3,20,000              48,000           2,72,000
2               2,72,000              81,600           1,90,400
3               1,90,400              57,120           1,33,280

Due to applicability of half-in-first-year rule, depreciation in year of purchase will be half of normal depreciation.

ekkarill92 answered 11 months ago
Next > < Previous

Related Solutions

The cost of an equipment is $300,000 and falls in asset Class 9 for CCA deprecation...
The cost of an equipment is $300,000 and falls in asset Class 9 for CCA deprecation purpose. The depreciation rate of Class 9 assets is 25%. You intend to sell the equipment in 5 years for a salvage value of $40,000. At the time of sale, you still anticipate having other assets in the give asset class. Your tax rate is 35% and your discount rate is 14%. What is the present values of CCA tax shield?
1. You have just purchased a Time machine for 10,000,000. It is in the 30% CCA...
1. You have just purchased a Time machine for 10,000,000. It is in the 30% CCA category and will last for 8 years. The asset class will be closed at the end of the project. What is the undepreciated capital cost at the end of the 3rd year? (Create a CCA table and remember the half year rule)
Waylander Coatings Company purchased waterproofing equipment on January 6 for $320,000. The equipment was expected to...
Waylander Coatings Company purchased waterproofing equipment on January 6 for $320,000. The equipment was expected to have a useful life of four years, or 20,000 operating hours, and a residual value of $35,000. The equipment was used for 7,200 hours during Year 1, 6,400 hours in Year 2, 4,400 hours in Year 3, and 2,000 hours in Year 4. Required: 1. Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and...
Waylander Coatings Company purchased waterproofing equipment on January 6 for $320,000. The equipment was expected to...
Waylander Coatings Company purchased waterproofing equipment on January 6 for $320,000. The equipment was expected to have a useful life of four years, or 20,000 operating hours, and a residual value of $35,000. The equipment was used for 7,200 hours during Year 1, 6,400 hours in Year 2, 4,400 hours in Year 3, and 2,000 hours in Year 4. Required: 1. Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and...
Waylander Coatings Company purchased waterproofing equipment on January 6, 2015, for $320,000. The equipment was expected...
Waylander Coatings Company purchased waterproofing equipment on January 6, 2015, for $320,000. The equipment was expected to have a useful life of four years, or 20,000 operating hours, and a residual value of $35,000. The equipment was used for 7,200 hours during 2015, 6,400 hours in 2016, 4,400 hours in 2017, and 2,000 hours in 2018. 1. Determine the amount of depreciation expense for the years ended December 31, 2015, 2016, 2017, and 2018, by (a) the straight-line method, (b)...
A company is purchasing a new equipment in Class 8 (20% CCA rate -- declining balance...
A company is purchasing a new equipment in Class 8 (20% CCA rate -- declining balance class, half year rule applicable) in 2019 for $33,000. The machine is expected to result in annual revenue of $16,000 for each of the next five years and will be sold at the end of that time for an expected salvage value of $13,000. Maintenance expenses are expected to be $1,400 for the first year and to increase by $200 per year for each...
1. In 2018, ABC Corporation purchased a new photocopier (asset class 8) with a CCA rate...
1. In 2018, ABC Corporation purchased a new photocopier (asset class 8) with a CCA rate of 20% for $5,000, as well as a new truck (asset class 10) with a CCA rate of 30% for $40,000. Calculate the total CCA for ABC Corporation for each of the first three years. Show your calculations. 2. ABC Corporation is a large retailer that has many stores in Canada. Each location has a store manager who receives a fixed salary regardless of...
1. In 2018, ABC Corporation purchased a new photocopier (asset class 8) with a CCA rate...
1. In 2018, ABC Corporation purchased a new photocopier (asset class 8) with a CCA rate of 20% for $5,000, as well as a new truck (asset class 10) with a CCA rate of 30% for $40,000. * Calculate total CCA for ABC Corporation for each of the first 3 years.( SHOW ALL CALCULATIONS)
6-10 A company purchased factory equipment for $250,000. It is estimated that the equipment will have...
6-10 A company purchased factory equipment for $250,000. It is estimated that the equipment will have a $25,000 salvage value at the end of its estimated 5-year useful life. If the company uses the double-declining-balance method of depreciation, the amount of annual depreciation recorded for the second year after purchase would be $100,000 $60,000 $90,000 $43,200 The maturity value of a $30,000, 8%, 3-month note receivable is $30,600 $30,240 $32,400 $30,200 The following totals for the month of April were...
A company is considering purchasing factory equipment that costs $320,000 and is estimated to have no...
A company is considering purchasing factory equipment that costs $320,000 and is estimated to have no salvage value at the end of its 8-year useful life. If the equipment is purchased, annual revenues are expected to be $90,000 and annual operating expenses exclusive of depreciation expense are expected to be $40,000. The straight-line method of depreciation would be used. The cash payback period on the equipment is Select one: A. 3.6 years. B. 8.0 years. C. 3.2 years. D. 6.4...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT