Tori just purchased some equipment that belongs in a 35% CCA class. The equipment cost $167,401. What will be the book value of the equipment at the end of year three?

Question

Quizplus · Accepted Answer

The CCA rate for a 35% class is 35%. The book value of the equipment at the end of year three is the original cost minus the CCA claimed over the three years. The CCA claimed over the three years is $167,401 x 35% x 3 = $179,235. Therefore, the book value of the equipment at the end of year three is $167,401 - $179,235 = $58,349.

Tori Just Purchased Some Equipment That Belongs in a 35