QUESTION 1 - Chapter 5 (Continued) Solution: (1) 1) An additional class 8 asset was purchased for $20,000 on April 1. Maximum CCA for Class 8 is: (1) 2) An asset with a capital cost of $15,000 was sold for $4,000 on June 30. Minimum UCC on January 1 of the following year is: (1) 1 3) An asset with a capital cost of $15,000 was sold for $26,000 on September 1. Maximum CCA for Class 8 is: (1) 4) An asset with a capital cost of $15,000 was sold for $26,000 on September 1. Minimum UCC on January 1 of the following year is: (1) 5) An asset with a capital cost of $100,000 was sold on June 30 for $90,000. Also during the year, an 1) asset was purchased for $60,000. Maximum CCA for Class 8 is: 6) The last asset in the class, with a capital cost of $85,000, was sold on July 15 for $90,000. This (1) would give rise to: 7) The last asset in the class, with a capital cost of $85,000, was sold on August 1 for $70,000. This (1) ) would give rise to: IllIIlIII. Use the following information to answer the questions below. The Nelson Company has a taxation year end of December 31. On January 1 of the current year, the UCC of Class 8 was $80,000. The Nelson Company has a policy of always deducting maximum CCA. Each of the following questions deals with transactions during the current year which involved Class 8 assets. Choose the best answer for each question. (1) 8) An asset with a capital cost of $40,000 was sold for $50,000 on September 1. This would give rise to: Required: (1) 9) An asset with a capital cost of $70,000 was sold on October 1 for $90,000. An asset was purchased on November 1 for $100,000. Maximum CCA for Class 8 is: Choose the best answer for each question: (1) ) 10) An asset with a capital cost of $70,000 was sold on May 1 for $90,000. An asset was purchased on May 15 for $100,000. Minimum UCC on January 1 of the following year is: A) $4,000 B) $10,000 C) $10,800 D) $32,000 E) $13,000 F) $22,000 G) $25,000 H) $20,000 J) $43,200 K) $52,000 T) $5,000 Terminal Loss L) $60,800 U) $10,000 Terminal Loss M) $67,000 V) $5,000 Allowable Capital Loss N) $72,000 W) $10,000 Allowable Capital Loss O) $76,000 X) $5,000 Taxable Capital Gain P) $91,000 Y) $10,000 Taxable Capital Gain Q) $98,000 R) $5,000 Recapture S) $10,000 Recapture