Question
Rayna owns three rental office buildings. She has asked you to advise her as to the maximum capital cost allowance (CCA) she can claim on
Rayna owns three rental office buildings. She has asked you to advise her as to the maximum capital cost allowance (CCA) she can claim on these properties for the current year. All the buildings were purchased subsequent to 1987, but prior to 2007, and are of brick construction.
| Property | 1 | 2 | 3 |
| Original cost | $1,500,000 | $600,000 | $160,000 |
| UCC at January 1 | 1,225,000 | 500,000 | 150,000 |
| Rental revenue | 80,000 | 29,800 | 13,400 |
| Expenses: |
|
|
|
| Interest | 35,000 | 15,000 | 9,000 |
| Property taxes | 15,000 | 7,400 | 3,800 |
| Other | 13,000 | 12,000 | 1,000 |
What is the maximum CCA that Rayna can claim on the rental properties for the current year?
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Managerial Accounting
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
13th edition
978-1285868806, 1285868803, 978-1305691254, 978-1305465640, 1305465644, 978-1285866307
