In October 2003, JJ Ltd., purchased an asset for $50,000. The asset was sold in January 2005 for $30,000. A replacement asset was purchased for $56,000 and it is now the only asset in the class. In 2007, the company sold the "new" asset in July for $34,000. The asset was not replaced and the asset class was closed. Assume that the firm has a December 31 year end, the applicable tax rate is 40% and the CCA rate is 20% Required: (a) Calculate CCA claimed in each year from 2003 through 2007 Cost 50 000 2003 COA ( 5000 , SON 45000 uso 20024 CCA (450 20 1 201) 19000) 36001 odding 36000 less 3.000 2005 CCA 62000x 200 62000 (124004 (4960042et) 49400 2016ICA Lago) 20074CA ( 39 680 x201) 39 40 (7936) (b) For 2007, also calculate the UCC 312un (1) recapture depreciation, terminal loss, capital gains if any, that result from the sale of the asset, and Gost: 56000 Proceed: 34000 2256 UCC = 31744 terminal Loss (i) the related tax effect on taxes payable tax saving = 2256 x40% 16 902.40 In October 2003, JJ Ltd., purchased an asset for $50,000. The asset was sold in January 2005 for $30,000. A replacement asset was purchased for $56,000 and it is now the only asset in the class. In 2007, the company sold the "new" asset in July for $34,000. The asset was not replaced and the asset class was closed. Assume that the firm has a December 31 year end, the applicable tax rate is 40% and the CCA rate is 20% Required: (a) Calculate CCA claimed in each year from 2003 through 2007 Cost 50 000 2003 COA ( 5000 , SON 45000 uso 20024 CCA (450 20 1 201) 19000) 36001 odding 36000 less 3.000 2005 CCA 62000x 200 62000 (124004 (4960042et) 49400 2016ICA Lago) 20074CA ( 39 680 x201) 39 40 (7936) (b) For 2007, also calculate the UCC 312un (1) recapture depreciation, terminal loss, capital gains if any, that result from the sale of the asset, and Gost: 56000 Proceed: 34000 2256 UCC = 31744 terminal Loss (i) the related tax effect on taxes payable tax saving = 2256 x40% 16 902.40