Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Assignment Problem Five - i (GOA, Recapture, And Terminal Losses - includes Taxable Capital Gain] On January 1, 2020. the beginning of its taxation year,

image text in transcribed
Assignment Problem Five - i" (GOA, Recapture, And Terminal Losses - includes Taxable Capital Gain] On January 1, 2020. the beginning of its taxation year, Bard Ltd. has the following information on depreciable assets in its records: Undepreciatecl Original Type Of Asset Capital cost Capital cost Class 0 Furniture $ 24,000 $ 142,000 Class 1 Buildings {Acquired In 2005} 552,000 846,000 Class '10 Automobiles 220, 000 315, 000 During the 2020 taxation year, the following transactions occur: Sale Of Furniture Furniture with an original cost of $52,000 was sold for $36,000. There are still assets in Class 8 at the end of the year. Purchase And Sale Of Buildings A new building was acquired on February 1, 2020, at a cost of $325,000. Of this total, $75,000 was the estimated value of the land on which the building was situated. The building will be used 100 percent for office space and is placed in a separate Class 1. Also during the year, a building [including the land} with an original cost of $335,000 was sold for $352,000. Of the $352,000 received. $200,000 is for the land on which the building is situated. The adjusted cost base of the land was equal to the $200,000 proceeds of disposition. Sale DfAutomobiIes An extensive analysis of capital and operating costs indicated that the company would be better off leasing automobiles, rather than continuing to purchase and retain ownership of these assets. As a consequence, all of the company's automobiles were sold on December 28, 2020, for $185,000. The leased vehicles were delivered on January 2, 2021. Required: For the taxation year ending December 31, 2020, calculate the maximum CCA that can be deducted by Bard Ltd. for each CCA class. In addition, calculate the January 1, 2021, UCC balance for each class. As part of your answer, you should indicate any other tax consequences that would result from the described transactions

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial and Managerial Accounting

Authors: Belverd E. Needles, Marian Powers, Susan V. Crosson

9th edition

1439037809, 978-1439037805

More Books

Students also viewed these Accounting questions