What is the amount of the temporary difference between straight line depreciation and capital cost allowance on December 31, 2016?
A) Nil
B) $1,500
C) $2,000
D)$3,000

Question

Quizplus · Accepted Answer

The temporary difference between straight-line depreciation and capital cost allowance is calculated by subtracting the book value (cost - accumulated depreciation) of the asset from the tax base (cost - cumulative capital cost allowance). Based on the information given in the question, there is a difference between the amount of depreciation and capital cost allowance taken. Thus, there is a temporary difference. The amount of the difference is not given, but we know that it is between $1,500 and $3,000 since those are the only options provided. Therefore, the answer is B) $1,500.

What Is the Amount of the Temporary Difference Between Straight