Given the following information, calculate the straight-line depreciation rate for the first year using the midmonth convention. Cost recovery period: 27 ½ years, Date of purchase: April 10ᵗʰ.

Question

Quizplus · Accepted Answer

The mid-month convention treats the asset as if it were purchased on the 15th of the month. Therefore, the asset is depreciated for 8.5 months in the first year (12 months - 3.5 months). The straight-line depreciation rate is calculated as follows:Depreciation rate = (1 / Cost recovery period) x (Number of months in first year / 12)= (1 / 27.5) x (8.5 / 12)= 2.6%

Given the Following Information, Calculate the Straight-Line Depreciation Rate for the First