AP $5-8($CCA$,$ Recapture, and Terminal Losses$-$Includes Taxable Capital Gains$)$

Microfast Ltd$.$ has a calendar$-$based taxation year ending December $31.$ As of January $1,2023.$

Microfast had the following UCC balances for its various depreciable property:

Other information related to the company's depreciable property is as follows:

Class $1$ The January $1,2023,$ UCC balance in class $1$ contains one property that is

a single building that was acquired in $2017$ for $$900,000.$ Of this total, $$200,000$ was

allocated to the land on which the building was situated and the remaining $$700,000$

to the building. On February $1,2023,$ the building, which was in need of considerable

repairs, and the land were sold for $$800,000-$$$200,000$ for the land and $$600,000$ for

the building.

A new building was purchased on November $15,2023,$ at a cost $$1,450,000$ with

$$350,000$ of this total being allocated to the land on which the building was situated and

the remaining $$1,100,000$ for the building. Fifty percent of the floor space of the new

building is used for manufacturing and processing with the remaining $50\%$ used for office

space in support of the manufacturing and processing. An election was filed to include the

building in a separate class $1.$

Class $8$ On March $1,2023,$ the company purchased class $8$ property for $$111,256.$ As a

result of trading in older class $8$ property, the company received a trade$-$in allowance of

$$20,000,$ resulting in a net cost for the new property of $$91,256.$ The capital cost of the

property traded in was $$58,425.$

Class $10$ The January $1,2023,$ UCC balance in class $10$ reflects $10$ zero$-$emission

vehicles that are vans with limited seating capacity that are used to transport goods by the

company's sales staff. The vehicles were eligible for the $$5,000$ incentive offered by the

federal government, which reduced their pre$-$sales tax cost from Assignment Problem Five $-8$

$($CCA And CEC Transition Calculations$)$

Microhard Ltd$.$ has a December $31$ year end. As of January $1,2020,$ Microhard had the following

UCC balances for its various tangible assets:

Class $1$ $$606,929$

Class $8347,291$

Class $10142,800$

Class $13175,500$

Capital Cost Allowance $241$

Assignment Problems

Other information related to the company$$s tangible assets is as follows:

Class $1$ The January $1,2020,$ balance in Class $1$ reflected a single building that was

acquired in $2016$ for $$900,000.$ Of this total, $$200,000$ was allocated to the land on

which the building was situated. On February $1,2020,$ this building and the land was

sold for $$800,000.$ At this time, the value of the land was unchanged at $$200,000.$

A new building was purchased on November $15,2020,$ at a cost of $$950,000,$ with

$$150,000$ of this total being allocated to the land on which the building was situated.

The new building is used $50$ percent for manufacturing and processing and $50$ percent

for office space. It is allocated to a separate Class $1.$

Class $8$ On March $1,2020,$ the company acquired Class $8$ assets for $$111,256.$ As a

result of trading in older Class $8$ assets, the company received a trade in allowance of

$$20,000,$ resulting in a net cost for the new assets of $$91,256.$ The capital cost of the

assets traded in was $$58,425.$

Class $10$ The January $1,2020,$ balance in Class $10$ reflects eight vehicles that were

being used by the company$$s sales staff. Their original cost totaled $$240,000.$ The

company decided it would be more economical to provide their sales staff with leased

vehicles. To this end, the eight vehicles were sold for proceeds of $$150,000$ on October $31,$

$2020.$ The amount received for each vehicle was less than its capital cost.

On August $1,2020,$ the company acquires a BMW $750$ for the use of the company$$s

president. The cost of this vehicle was $$142,000.$ The president drives it $65,000$ kilometres

during the $2020$ fiscal year, with only $10,000$ kilometres involving employment duties.

The president is not a shareholder of Microhard.

Class $13$ Some of the company$$s business is conducted out of a building that is leased.

The lease, which had an initial term of six years, can be renewed for two additional years

at the end of the initial term. Immediately after the lease was signed on January $1,$

$2018,$ Microhard spent $$216,000$ on leasehold improvements. During April $2020,$ an

additional $$42,000$ was spent upgrading this property.

It is the policy of the company to deduct maximum CCA in each year.

Required: Calculate the maximum CCA for the year ending December $31,2020.$ Your answer

should include the maximum that can be deducted for each CCA class. In addition, indicate the

amount of a