On January 3, 2017, Acme Inc. (Acme) purchased new equipment to process fresh fruit into jams and
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a. What is the maximum amount of CCA that could be claimed for tax purposes in 2017? Explain.
b. What is the maximum amount of CCA that could be claimed for tax purposes in 2018? Explain.
c. If Acme decides to depreciate the equipment on a straight-line basis over 15 years, what would the depreciation expense be in 2017?
d. How does the useful life estimated by Acme's management affect the amount of CCA that can be claimed? Explain.
e. Why are the amounts calculated in (a) and (c) likely different? Explain.
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