Under CCA, an asset which originally cost $100,000, incurred installation costs of $10,000, and hasan estimated salvage value of $25,000, is being depreciated using a 30% CCA rate. What is thedepreciation expense in year 1?

Question

Quizplus · Accepted Answer

The depreciation expense in year 1 is $16,500. This is calculated as follows:Depreciation expense = (Cost of asset + Installation costs - Salvage value) x CCA rate= ($100,000 + $10,000 - $25,000) x 30%= $85,000 x 30%= $16,500

Under CCA, an Asset Which Originally Cost $100,000, Incurred Installation