At the beginning of 2019, Enco Ltd acquired office furniture at a cost of $25,000. The furniture is being amortized straight line over 10 years and has no expected residual value. For income tax purposes, the furniture falls in class 8, with a 20% declining balance amortization rate, and is subject to the half year rule resulting in only half of the calculated declining balance amortization being claimed in 2019. Calculate the amortization expense for 2019 and 2020 under each method.

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The Answer of At the beginning of 2019, Enco Ltd acquired office furniture at a cost of $25,000. The furniture is being amortized straight line over 10 years and has no expected residual value. For income tax purposes, the furniture falls in class 8, with a 20% declining balance amortization rate, and is subject to the half year rule resulting in only half of the calculated declining balance amortization being claimed in 2019. Calculate the amortization expense for 2019 and 2020 under each method.

At the Beginning of 2019, Enco Ltd Acquired Office Furniture