a) Tartt Co. has the following opening UCC balances for its 2021…
Question a) Tartt Co. has the following opening UCC balances for its 2021… a) Tartt Co. has the following opening UCC balances for its 2021 fiscal year:Class 1 (4%) $477,000Class 8 143,000Class 10 76,000Class 50 15,000 During 2021, Tartt Co.:Purchased $15,000 of new furniture,Sold a motor vehicle for $12,000 (original cost: $27,000) and purchased a new one for $29,500, andDisposed of some old computer equipment for its scrap worth of $200 (original cost $8,000). Required (use the half year rule):Calculate Tartt Co’s maximum CCA for 2021 and show the activity in each CCA Class including its ending balance. b) Crimm Inc. has the following opening UCC balances for its 2021 fiscal year: Class 1 (4%) $250,000Class 8 50,000Class 50 17,000 During 2021, Crimm:• Sold the property on which the building is located. The original cost of the property was $380,000 ($75,000 for the land, remainder for the building). The sale proceeds were $750,000 ($100,000 for the land, remainder for the building).• Signed a lease for new premises out of which to operate. The lease signed was for eight years, and offered three renewal periods of four, three and two years respectively. Before moving in, Crimm spent $120,000 on leasehold improvements.• Paid for the parking lot outside its new premises to be repaved. This cost $25,000.• Purchased an $80,000 electric vehicle for its president, Trent Crimm. Required (use AccII rules):i) Calculate the maximum CCA for the leasehold improvements for each year CCA will be taken on it (i.e., 2021 – ?).ii) Calculate Crimm’s maximum CCA for all classes for 2021 and show the activity in each CCA Class including its ending balance. c) McAdoo Ltd. manufactures soccer equipment and apparel. It incorporated and began operating on January 1, 2021, spending $5,000 on incorporation fees. On that day, it also purchased manufacturing equipment for $80,000 and purchased a patent off a business that had decided to forgo its sporting equipment line for $6,000. The patent is good until June 30, 2025. McAdoo chose a December 31, 2021 year end. Other purchases include:A Manufacturing Warehouse: $240,000A delivery truck: $60,000Small Tools (<$500 each);$8,000 Required (use AccII rules):i) Determine whether it is better to use Class 14 or Class 44 for the patent (i.e. which one provides the greatest CCA in 2021?).ii) Calculate the maximum CCA for the 2021 fiscal year.iii) How would the CCA for the small tools be calculated under the regular (half year) rules? d) For any dispositions in parts (a), (b) and (c), identify if there has been a capital gain or capital loss, and if so, how much. Law Social Science Tax law ACCOUNTING TAX4001 Share QuestionEmailCopy link Comments (0)
