Question
Lou Silva has owned and operated The Wellness Store for fifteen years. The company's year-end is December 31st. The following chart lists the company's assets
Lou Silva has owned and operated The Wellness Store for fifteen years. The company's year-end is December 31st. The following chart lists the company's assets owned prior to 2020 and their UCC balances as of January 1, 2020.
Asset | UCC Balance |
Store (building purchased in 2005) (Class 1 4%) | $100,000 |
Delivery van (Class 10) | 15,000 |
Furniture and office equipment (Class 8) | 30,000 |
Photocopier purchased in 2018 (Separate Class 8) | 2,000 |
Patent (purchased in 2017) | 10,000 |
The following transactions took place in 2020: a. Lou purchased $2,000 worth of small tools (each costing under $500). b. The delivery van was sold for $12,000. The original cost was $20,000. A second-hand van was purchased in the year for $16,000. c. $15,000 was paid for an air conditioning system in the building, which was added to the cost of the standard Class 1 pool. d. Lou sold the photocopier for $1,500 in the year, and will replace it in January, 2021 with a second-hand model valued at $1,700. e. Lou amortizes the patent in Class 44. f. The business acquired a franchise on March 1st of 2020 for $55,000. The franchise has a limited legal life of 20 years. (Ignore leap year effects.)
Instructions: Input amounts without dollar signs or commas, and round to the nearest dollar. If answer is zero, input "0". Positive numbers ONLY.
What is the maximum CCA that can be claimed on the Store Building?
What is the maximum CCA that can be claimed on the Delivery Van?
What is the maximum CCA that can be claimed on the Furniture and Office Equipment?
What is the maximum CCA that can be claimed on the Photocopier?
What is the maximum CCA that can be claimed on the Patent?
What is the maximum CCA that can be claimed on the Tools?
What is the maximum CCA that can be claimed on the Franchise?
What is the total Recapture incurred from this scenario?
What is the total Terminal Loss incurred from this scenario?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started