The capital cost allowance (CCA) deduction for any given taxation year is ________. Choose the correct...
The capital cost allowance (CCA) deduction for any given taxation year is ________.
Choose the correct answer.
A.
not an optional amount and is equal to its undepreciated capital cost (UCC) balance multiplied by the prescribed rate indicated in the Income Tax Act
B.
reduced by the cost of assets that have been sold or otherwise disposed of
C.
equal to the amount of depreciation and amortization claimed on its financial accounting reports for the year
D.
an optional amount equal to any selected amount that is less than or equal to the maximum CCA as prescribed in the Income Tax Act
Homework Answers
A ) not an optional amount and is equal to its undepreciated
capital cost (UCC) balance multiplied by the prescribed rate
indicated in the Income Tax Act
capital cost allowance (CCA) deduction = UCC x CCA Rate, It is the
maximum deduction one can clam for.
Add Answer to:
The capital cost allowance (CCA) deduction for any given
taxation year is ________.
Choose the correct...
Pronghorn Corporation purchased equipment very late in 2020. Based on generous capital cost allowance rates provided...
Pronghorn Corporation purchased equipment very late in 2020. Based on generous capital cost allowance rates provided in the Income Tax Act, Pronghorn Corporation claimed CCA on its 2020 tax return but did not record any depreciation because the equipment was being tested. This temporary difference will reverse and cause taxable amounts of $29,800 in 2021, $31,500 in 2022, and $49,400 in 2023. Pronghorn’s accounting income for 2020 is $237,400 and $207,400 in each of 2021 and 2022, and the tax...
Q2. (25 marks) Calculate depreciation and CCA On July 2, 2019, Vicuna Inc. purchased equipment for...
Q2. (25 marks) Calculate depreciation and CCA On July 2, 2019, Vicuna Inc. purchased equipment for $720,000. This equipment has an estimated useful life of six years and an estimated residual value of $30,000. Depreciation is taken for the portion of the year the asset is used. The asset is a Class 8 asset with a maximum CCA rate of 20%. Vicuna has a December year end. Instructions a) Complete the schedule below by determining the depreciation expense/CCA and year-end...
CANADIAN TAXATION 2019 In the current year C purchased new office equipment costing $25,000. Later in...
CANADIAN TAXATION 2019 In the current year C purchased new office equipment costing $25,000. Later in the same year he sold some office equipment for $35,000 that originally cost $100,000. At the beginning of the current year the UCC of the office equipment class was $70,000. What is the maximum CCA deduction for the office equipment class that C can claim in the current year? Note: Do not place a minus sign in front of the amount. In the current...
Bramble Corporation purchased equipment very late in 2017. Based on generous capital cost allowance rates provided...
Bramble Corporation purchased equipment very late in 2017. Based on generous capital cost allowance rates provided in the Income Tax Act, Bramble Corporation claimed CCA on its 2017 tax return but did not record any depreciation because the equipment had not yet been put into use. This temporary difference will reverse and cause taxable amounts of $34,600 in 2018, $30,800 in 2019, and $42,400 in 2020. Bramble's accounting income for 2017 is $233,600 and the tax rate is 35% for...
The plant expansion cost was 4.5 million and it qualifies for capital cost allowance (therefore allowing...
The plant expansion cost was 4.5 million and it qualifies for
capital cost allowance (therefore allowing 10% CCA rate). The
building was put in use Jul 01,2017. It had a useful life of 30
years and recorded depreciation for 75000. No deferred taxes have
been recorded. Research shows that a typical facility of this
nature has a 20-year useful life. Provide alternatives regarding
this and recommend the best solution
if
it needs to depreciated on 30 year or 20 year...
Taxation
Min-ju Yang is employed as a salesperson and earns both a salary and commission income. In 2020, Min-ju's commissions totaled $5,500. Min-ju is required to pay for numerous employment expenses each year which are identified on the annual T2200. Min-ju paid $6,200 for advertising and promotion during the year. Min-ju uses a personal vehicle for work purposes, and in 2020, the total capital cost allowance for the car was $12,000, and $320 of interest was paid per month on a...
Allied reported deferred income tax on loss carried forward of $ 233,000 and deferred tax liability for 2021 as $ 72,000 vs 2020 for $ 96,000
At the end of 2021, Allied reported deferred income tax on loss carried forward of $ 233,000 and deferred tax liability for 2021 as $ 72,000 vs 2020 for $ 96,000. The deferred income taxes have resulted primarily from temporary differences in the recognition of capital cost allowance (CCA) claimed in excess of depreciation recorded. Management is reasonably certain that the tax benefits of the tax losses carried forward can be realized by claiming less CCA than depreciation. It has...
1. what are the underpreciated capital cost at the end of each year? 2. calculate the...
1. what are the underpreciated capital cost
at the end of each year?
2. calculate the yearly tax savings over the 5 years that
results from the CCA deduction from income?
An astute young engineer at Lochardier is examining the tax benefits of buying an aircraft. Since this is a depreciable asset, it will allow the company to realize a tax benefit. The aircraft will cost $750 million. The engineer remembers that aircraft are class 9 items and therefore have...
Pleases correct the red X. Rodger would claim a $_______________ deduction for qualified business income. Problem...
Pleases correct the red X.
Rodger would claim a $_______________ deduction for qualified
business income.
Problem 12-12 (LO. 1) In the current year, Riflebird Company had operating income of $220,000, operating expenses of $175,000, and a long- term capital loss of $10,000. How do Riflebird Company and Roger, the sole owner of Riflebird, report this information on their respective Federal income tax returns for the current year under the following assumptions? If an amount is zero, enter "0" a. Riflebird...
A company is considering selling one of its two factories used in its business in Canada....
A company is considering selling one of its two factories used in its business in Canada. The building was aquired in 2016 at a cost of $1,00,000 and is allocated to a seperate class 1 for CCA purposes, which had a UCC balance of $800,000 at the begining of the year. Which of the following statements is correct with respect to the tax consequences that would arise in connection with the proposed sale of the building: a)If the building were...
Q2. (25 marks) Calculate depreciation and CCA On July 2, 2019, Vicuna Inc. purchased equipment for $720,000. This equipment has an estimated useful life of six years and an estimated residual value of $30,000. Depreciation is taken for the portion of the year the asset is used. The asset is a Class 8 asset with a maximum CCA rate of 20%. Vicuna has a December year end. Instructions a) Complete the schedule below by determining the depreciation expense/CCA and year-end...
CANADIAN TAXATION 2019 In the current year C purchased new office equipment costing $25,000. Later in the same year he sold some office equipment for $35,000 that originally cost $100,000. At the beginning of the current year the UCC of the office equipment class was $70,000. What is the maximum CCA deduction for the office equipment class that C can claim in the current year? Note: Do not place a minus sign in front of the amount. In the current...
Bramble Corporation purchased equipment very late in 2017. Based on generous capital cost allowance rates provided in the Income Tax Act, Bramble Corporation claimed CCA on its 2017 tax return but did not record any depreciation because the equipment had not yet been put into use. This temporary difference will reverse and cause taxable amounts of $34,600 in 2018, $30,800 in 2019, and $42,400 in 2020. Bramble's accounting income for 2017 is $233,600 and the tax rate is 35% for...
The plant expansion cost was 4.5 million and it qualifies for
capital cost allowance (therefore allowing 10% CCA rate). The
building was put in use Jul 01,2017. It had a useful life of 30
years and recorded depreciation for 75000. No deferred taxes have
been recorded. Research shows that a typical facility of this
nature has a 20-year useful life. Provide alternatives regarding
this and recommend the best solution
if
it needs to depreciated on 30 year or 20 year...
1. what are the underpreciated capital cost
at the end of each year?
2. calculate the yearly tax savings over the 5 years that
results from the CCA deduction from income?
An astute young engineer at Lochardier is examining the tax benefits of buying an aircraft. Since this is a depreciable asset, it will allow the company to realize a tax benefit. The aircraft will cost $750 million. The engineer remembers that aircraft are class 9 items and therefore have...
Pleases correct the red X.
Rodger would claim a $_______________ deduction for qualified
business income.
Problem 12-12 (LO. 1) In the current year, Riflebird Company had operating income of $220,000, operating expenses of $175,000, and a long- term capital loss of $10,000. How do Riflebird Company and Roger, the sole owner of Riflebird, report this information on their respective Federal income tax returns for the current year under the following assumptions? If an amount is zero, enter "0" a. Riflebird...
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