Practice Quiz Chapter 11

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. A machine purchased for $60,000 has a depreciable life of 5 years. It will have an expected salvage value of $8,000 at the end of its life. Using the straight-line method what is the book value at the end of Year 3?

a) $43200 correct incorrect

b) $28,800 correct incorrect

c) $42200 correct incorrect

d) $32400 correct incorrect

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. An asset has an undepreciated capital cost of $10,368. The asset cost $36,000 when purchased and it has been depreciated with CCA rate=40%. Determine how many years the asset has been in service. 50% rule applies.

a) 2 years correct incorrect

b) 5 years correct incorrect

c) 4 years correct incorrect

d) 3 years correct incorrect

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. Using the SOYD method for an asset with a cost basis of $4,600, useful life of 4 years, and salvage value of $700, calculate the book value at the end of its second year.

a) $1870 correct incorrect

b) $1356 correct incorrect

c) $1700 correct incorrect

d) $2850 correct incorrect

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. A truck has an estimated initial cost of $32,000 and is expected to give service for 190,000 kilometers, resulting in a $4,300 salvage value. Calculate the allowed depreciation amount for the year in which the truck usage was 25,000 kilometers.

a) $3644.73 correct incorrect

b) $3225.73 correct incorrect

c) $3344.61 correct incorrect

d) $3354.25 correct incorrect

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. A company is trying to decide whether to keep a piece of machinery, which typically lasts for 7 years. The company uses DDB depreciation for book depreciation purposes and this is the fifth year of ownership. The item cost $200,000 new. What was the depreciation in Year 4?

a) $4455.13 correct incorrect

b) $3566.24 correct incorrect

c) $24336.24 correct incorrect

d) $20824.25 correct incorrect

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. DreamTech has purchased a new system at the beginning of the fiscal year at a cost of $450,000 with an expected life of 10 years. Suppose the system is in class 10 (45%) and the corporate tax rate is 35%. Determine Year 1 ending undepreciated capital cost.

a) $123,750 correct incorrect

b) $146,250 correct incorrect

c) $247,500 correct incorrect

d) $292,500 correct incorrect

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. DreamTech has purchased a new system at the beginning of the fiscal year at a cost of $450,000 with an expected life of 10 years. Suppose the system is in class 10 (45%) and the corporate tax rate is 35%. Determine Year 4 capital cost allowance.

a) $23,290 correct incorrect

b) $27,565 correct incorrect

c) $44,917 correct incorrect

d) $44,411 correct incorrect

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. DreamTech has purchased a new system at the beginning of the fiscal year at a cost of $450,000 with an expected life of 10 years. Suppose the system is in class 10 (45%) and the corporate tax rate is 35%.Determine year 7 beginning undepreciated capital cost.

a) $10,192 correct incorrect

b) $16,420 correct incorrect

c) $18,275 correct incorrect

d) $35,244 correct incorrect

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. Suppose BinTech sold all the assets in the class 8 with a capital cost allowance rate of 20% for the proceeds of $85,000. The original cost of the assets was $100,000. The opening balance of the class 8 undepreciated capital cost pool was $70,000. Determine capital cost allowance recapture.

a) ?$3,000 correct incorrect

b) ?$6,000 correct incorrect

c) ?$15,000 correct incorrect

d) ?$30,000 correct incorrect

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. Mr. Bean has just acquired a new asset for his venture business at a cost of $500,000. You are asked to help him determine the book value after six years from now, given the relevant depreciation rate is 30%, applying the declining-balance depreciation method.

a) $25,000 correct incorrect

b) $58,825 correct incorrect

c) $75,825 correct incorrect

d) $150,000 correct incorrect