1. Calculate the maximum CCA that can be claimed, as well as any other income inclusions or deductions.n
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2. Calculate the ending UCC balance in each class. n
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3. Identify adjustments you will need to make to reconcile accounting income and income for tax purposes.

 

Problem 1 Memorandum Acme Inc. To: From: Date: Subject: Staff Accountant Controller Month xx, Year xx CCA Calculations and Adjustments We are in the process of completing the corporate tax return and we have come to the fixed asset section, where we have identified three thngs that I would like you to do. (1) Calculate the maximum CCA that can be claimed, as well as any other income inclusions or deductions. (2) Calculate the ending UCC balance in each class. (3) Identify adjustments you will need to make to reconcile accounting income and income for tax purposes. The following is the information in our files: Acme Inc. has been in business for a number of years. The following are the balances in its CCA classes at the end of its last fiscal year: Class Note Rate Balance 225,000 30,000 20,000 13,000 1. 8. 10 10.1 Single building (NRB) Multiple assets Multiple assets Passenger vehicle 6% 20% 30% 30% 3 During the year Acme had the following transactions: (1) It sold its building and moved into rented space. It received proceeds of $250,000 for the building which had an original cost of $275,000 and a net book value of $180,000. (2) It sold a class 8 asset for $3,000 which had an original cost of $6,500 and a net book value of $3,600. (3) It bought a class 10 asset for $6,000. It also sold a class 10 asset for $8,000 which had an original cost of $7,000 and a net book value of $5,500. (4) It sold the class 10.1 asset for $15,000 which had an original cost of $45,000 and a net book value of $35,000.