Cost of the asset$100,000
Life of the asset 5 years
Depreciation rate20%
Capital cost allowance rate 50%
Residual value of the asset nil
Income tax rate 50%
-Depreciation is usually calculated on a straight-line basis.

Question

Cost of the asset$100,000 
Life of the asset 5 years 
Depreciation rate20% 
Capital cost allowance rate 50% 
Residual value of the asset nil 
Income tax rate 50%
-Depreciation is usually calculated on a straight-line basis.

Quizplus · Accepted Answer

Depreciation on a straight-line basis means spreading the cost of the asset evenly over its useful life, which is consistent with the given information, despite the mention of different rates which are not applied in straight-line depreciation.

Cost of the Asset$100,000