JMR Corporation has one asset worth $350,000.Depreciation accumulated to date is $200,000 and accumulated CCA is $230,000.Assuming the tax rate is 40% what is the income tax implication?

Question

Quizplus · Accepted Answer

The difference between accumulated CCA ($230,000) and accumulated depreciation ($200,000) is $30,000. The tax rate is 40%, so the deferred tax liability is 40% of $30,000, which is $12,000.

JMR Corporation Has One Asset Worth $350,000