Question

Our new computer system cost us $100,000. We will outgrow it in five years. When we sell it, we will probably get only 20% of the purchase price. CCA on the computer will be calculated at a 30% rate (Class 10).

Calculate the CCA and UCC values for five years. (Round the final answers to 2 decimal places. Omit $ sign in your response.)

Year	CCA	Ending UCC
1	$	$
2	$	$
3	$	$
4	$	$
5	$	$

What will be the after-tax proceeds from the sale assuming the asset class is continued? Assume a 40% tax rate. (Round the final answers to 2 decimal places. Omit $ sign in your response.)

After-tax proceeds  

Answer 1

			A	B=A*30%	C=A-B
		Year	Beginning UCC	CCA	Ending UCC
		1	100,000	30,000	70,000
		2	70,000	21,000	49,000
		3	49,000	14,700	34,300
		4	34,300	10,290	24,010
		5	24,010	7,203	16,807
	Selling price after 5 years=20%*100000	20,000
	UCC at end of 5 years	16,807
	Gain on sale =20000-16807	3,193
	Tax on gain =40%*3193	1,277.20
	After tax proceeds from sale	18,722.80	(20000-1277.20)