Capital Cost Allowance

1. Henney Co. has a December 31 year-end and deducted the maximum CCA each year.

The following are the beginning UCC balances on January 1, 2022:

Class 1 (4%) $616,000

Class 8 (20%) 82,000

Class 10 (30%) 79,000

The company purchased new furnishings for the building on December 15, 2022, at a cost of $23,000. Also, on December 15, 2022, the Company acquires two vehicles to be used in its delivery operations. The cost of these vehicles is $45,000 each (a total of $90,000).

They dispose of two existing vehicles for $26,000 in total. The original capital cost of this vehicle is $24,000 each.

Determine the maximum CCA that can be taken in 2022.

2. During 2023, the Company disposes of two of its delivery vehicles. These originally had a cost of $38,000 each, and proceeds for both vehicles totalled $52,000. They also sell furniture with an original cost of $9,600 for proceeds of $3,600.

Determine the maximum CCA that can be taken in 2023.

3. At the end of the 2024 taxation year, mounting losses force the Company to discontinue operations. The assets are sold as follows:

The building is sold for $900,000, with $150,000 of this amount being attributed to the land. Its original cost was $870,000 with $130,000 being attributed to the land.

All of the furniture is sold for $62,000. The original cost was $113,000.

The remaining vehicles are sold for $103,000, which is far less than the original cost.

Determine the maximum CCA that can be taken in 2024. In addition, indicate any tax effects resulting from the dispositions in 2022 to 2024.

CCA Question 2 Gibbons Co. is a management consulting company that was incorporated on March 15, 2022, and has a December 31 year-end. They began renting their office space on April 1st and immediately purchased furniture and fixtures for $46,900. They also purchased computer hardware for $9,000 (class 50 with a 55% CCA rate).

Gibbons Co. also purchased a 2022 Land Rover for $134,000.

Determine the maximum CCA that can be taken in 2022 by Gibbons Co.