Munro Limited reports the following information in its tax files covering the five-year period from 2012 to 2016. All assets are Class 10 with a 30% maximum CCA, and no capital assets had been acquired before 2012.
2012 Purchased assets A, B, and C for $20,000, $8,000, and $1,200, respectively.
2013 Sold asset B for $7,000; bought asset 0 for $4,800.
2014 Purchased asset E for $5,000; received an investment tax credit of $1,000.
2015 Sold asset A for $9,900 and asset C for $1,800.
2016 Asset 0 was destroyed by fire and was uninsured; asset E was sold to an employee for $500.
Instructions
(a) Prepare a capital cost allowance schedule for Class 10 assets covering the 2012 to 2016 period.
(b) Identify any capital gains, terminal losses, or recapture of CCA and indicate how each would be taxed.