Basil Partnership has the following information and transactions during 2021. 1) Class 1 (4%) building, opening UCC balance $660,000. This building was originally acquired in 2014 at a cost of $870,000. It was sold during the year for $585,000. There is no other property in this class. 2) Class 8 (20%) furniture, opening UCC balance $30,000. New office furniture was purchased for $10,000 to replace damaged items sold earlier in the year for $6,000 (original cost $9,000). 3) A new passenger vehicle (class 10.1 – 30%) was purchased during the year for $50,000. Following the above information, calculate the maximum CCA for 2021 with respect to each class. Provide details of all calculations.
Basil Partnership has the following information and transactions during 2021. 1) Class 1 (4%) building, opening UCC balance $660,000. This building was originally acquired in 2014 at a cost of $870,000. It was sold during the year for $585,000. There is no other property in this class. 2) Class 8 (20%) furniture, opening UCC balance $30,000. New office furniture was purchased for $10,000 to replace damaged items sold earlier in the year for $6,000 (original cost $9,000). 3) A new passenger vehicle (class 10.1 – 30%) was purchased during the year for $50,000. Following the above information, calculate the maximum CCA for 2021 with respect to each class. Provide details of all calculations.
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 35P
Related questions
Concept explainers
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Topic Video
Question
Basil Partnership has the following information and transactions during 2021.
1) Class 1 (4%) building, opening UCC balance $660,000. This building was originally acquired in 2014 at a cost of $870,000. It was sold during the year for $585,000. There is no other property in this class.
2) Class 8 (20%) furniture, opening UCC balance $30,000. New office furniture was purchased for $10,000 to replace damaged items sold earlier in the year for $6,000 (original cost $9,000).
3) A new passenger vehicle (class 10.1 – 30%) was purchased during the year for $50,000.
Following the above information, calculate the maximum CCA for 2021 with respect to each class. Provide details of all calculations.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you