Question

The only depreciation models needed for corporate tax calculations in Canada are:

a. Declining-balance and 150%-declining-balance.
b. Straight-line and units-of-production.
c. Straight-line and sum-of-year's digits.
d. Declining balance and double-declining balance.
e. Straight-line and declining balance.
Please select the correct option.

Answer 1

The correct answer is option e. Straight-line and declining balance depreciation models are the only models needed for corporate tax calculations in Canada.

Step-by-step explanation:

The correct answer is option e. Straight-line and declining balance depreciation models are the only models needed for corporate tax calculations in Canada.

In straight-line depreciation, the asset's value is evenly spread over its useful life. The annual depreciation expense is calculated by dividing the asset's cost by its useful life.

In declining balance depreciation, the asset's value is depreciated at a fixed rate each year. The depreciation expense is calculated by applying a fixed percentage to the asset's net book value.