A proprietorship has a calendar fiscal year and acquires a machine on April 1, 2020.
The machine has a cost of $56,000. The proprietor pays a contractor $17,000 to install the machine and pays a non-refundable provincial sales tax of $4,500.
The machinery is Class 8 equipment with a CCA rate of 20%.
Assuming that the opening UCC for Class 8 assets is $0, what is the maximum CCA that can be deducted for this machine in the fiscal year 2020?
Choose the correct answer.
a) $15,000
b) $7.750
c) $23,250
d) $21,900
| Cost of Machine | $ 56,000.00 | ||
| Add: | Installation Cost | $ 17,000.00 | |
| Add: | Sales Tax | $ 4,500.00 | |
| Total Cost | $ 77,500.00 | ||
| Fiscal Period (Oct 1, 2019- Sept 30, 2020) | |||
| Asset Purchased on April 1, 2020 | =6 months | ||
| Depreciation = Asset Cost*rate of depreciation* Period | |||
| Asset Cost | $ 77,500.00 | ||
| CCA (Rate of Depreciation) | 20% | ||
| Period | 6 months | ||
| Depreciation = $77500*20%*6/12 | $ 7,750.00 | ||
| Hence Option B is correct | |||
A proprietorship has a calendar fiscal year and acquires a machine on April 1, 2020. The...
A1A is a proprietorship that has a calendar fiscal year. The proprietorship begins operations on April 1, 2020 and acquires a machine on December 1, 2020. The machine has a cost of $22,000 and A1A incurs an additional $5,800 in expenses for installation. The machine is a Class 8 asset with a rate of 20%. What is the maximum CCA deduction A1A can take on this asset for the April 1 to December 31, 2020 fiscal year? Choose the correct...