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Cheyenne Corporation purchased a truck at the beginning of 2020 for $91,200. The truck is estimated to have a residual value of $3,000 and a useful life of 315,000 km. It was driven for 59,000 km in 2020 and 74,000 km in 2021.
Problem a. Calculate depreciation expense for 2020 and 2021 using the units of production method.
Problem b. For tax purposes, the asset's capital cost allowance (CCA) rate is 30%. Calculate the CCA for 2020 and 2021.
Financial Statement Analysis and Preparation
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