A $40,000 asset was purchased and classiﬁed as a Class 10 asset for CCA purposes. If the CCA rate is 30%, calculate CCA for year 3.

Question

Quizplus · Accepted Answer

The CCA rate for Class 10 assets is 30%. The CCA for year 3 is calculated as follows:CCA for year 3 = CCA rate x Undepreciated capital costUndepreciated capital cost = Original cost - Accumulated CCAAccumulated CCA for year 2 = CCA rate x Original cost x 2Accumulated CCA for year 2 = 0.30 x $40,000 x 2 = $24,000Undepreciated capital cost = $40,000 - $24,000 = $16,000CCA for year 3 = 0.30 x $16,000 = $4,800Therefore, the CCA for year 3 is $4,800.

A $40,000 Asset Was Purchased and Classiﬁed as a Class