LiCheng's Enterprises just purchased some fixed assets that belong in a 35% CCA class. The assets cost $1,901. What is the amount of the depreciation expense for year 2?

Question

Quizplus · Accepted Answer

In the first year, the depreciation expense is calculated as $1,901 * 35% * 50% (half-year rule) = $332.68. The remaining undepreciated capital cost (UCC) at the start of year 2 is $1,901 - $332.68 = $1,568.32. The depreciation expense for year 2 is then calculated as $1,568.32 * 35% = $548.63.

LiCheng's Enterprises Just Purchased Some Fixed Assets That Belong in a 35