Question

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)

Answer 1

As per CCA rule on deprecaible asset

The Canada revenue agency defines this as "the earliest of:

1. The time at which the property is first used by the claimant for the purpose of earning income;   Or
2. The time the property is delivered or is made available to the claimant and is capable of producing a saleable product or service".

CCA for ABC Corporation for each of the first 3 years

Table-(1) calculation of CCA for Photocopier

Asset	Deprecaible value/Calculation	Rate	CCA amount
Photocopier	5000*20%*50%(as per Half year Rule)=500	20%	500(1 st Year)
Photocopier	5000-500=4500 4500*20%=900	20%	900(2nd Year)
Photocopier	4500-900=3600 3600*20%=720	20%	720(3 rd year)
	Total(CCA)		2120

Table-(2) CCA on New truck

Asset	Deprecaible amount/Calculation	Rate	CCA amount
Truck	40000*30%*50%(Half year Rule)=6000	30%	6000(1 st year)
	40000-6000=34000 34000*30%=10200	30%	10200(2 nd year)
	34000-10200=23800 23800*30%=7140	30%	7140(3 rd year)
	Total		23340

Total CCA that ABC Corporation is for the first three years is Table (1)+ Table (2)=25460