Question 9.1 (Total: 28 marks; 2 marks per ? in part 1, 4 marks for...
60.1K
Verified Solution
Link Copied!
Question
Accounting
Question 9.1 (Total: 28 marks; 2 marks per ? in part 1, 4 marks for part 2) On July 3, 2019, Spicy P Corp. purchased equipment for $720,000. This equipment has an estimated useful life of six years and an estimated residual value of $30,000. Depreciation is taken for the portion of the year the asset is used. The asset is a Class 8 asset with a maximum CCA rate of 20%. Spicy P has a December year end. Required 1. Complete the schedule below by determining the depreciation expense/CCA and year-end book values/UCC for 2019 and 2020 using the 1) double-declining-balance method, 2) capital cost allowance method (using maximum rate). Double-Declining Balance Method 2019 2020 Depreciation expense for year ? ? Accumulated depreciation ? ? Year-end book value ? ? Capital Cost Allowance Method 2019 2020 CCA for year ? ? End of year UCC ? ? Total CCA claimed ? ? 2. Instead, assume Spicy P. used straight-line depreciation during 2019 and 2020. During 2021, the company determined that the equipment would be useful to the company for only one more year beyond 2021. Residual value is estimated at $40,000. Calculate the amount of depreciation expense for the 2021 income statement.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
