Homework answers / question archive / Grant MacEwan University - ACCT 328 1)Which of the following statements is INCORRECT?   Choose the correct answer

Grant MacEwan University - ACCT 328 1)Which of the following statements is INCORRECT?   Choose the correct answer

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Grant MacEwan University - ACCT 328

1)Which of the following statements is INCORRECT?

 

Choose the correct answer.

A.

The CCA deduction for Class 14.1 is calculated using the declining balance method.

B.

Property that is goodwill or was considered eligible capital property prior to January? 1, 2017 is included in Class 14.1.

C.

Property acquired after? 2016, other? than: tangible? property, property that is not acquired for the purpose of gaining or producing income from a business or property or property that is included in another CCA? class, is included in Class 14.1.

D.

The CCA deduction for Class 14.1 is calculated using the straight line method.

 

 

2. Assume an asset class has only one asset. Prior to selling the? asset, the business has taken a CCA deduction of? $10,000 and the market value of the asset has declined? $5,000. Upon disposition of the? asset, ________ will be recognized.

Choose the correct answer.

A.

CCA recapture

B.

a terminal loss

C.

a capital gain

D.

an additional CCA deduction

 

3. Which of the following is NOT correct with respect to CCA Class? 10.1?

Choose the correct answer.

A.

Disposition of passenger vehicles out of Class 10.1 cannot result in recapture or terminal? loss, instead one half of the CCA calculated is allowed as a deduction.

B.

This is the CCA class for passenger vehicles with a cost in excess of? $30,000.

C.

A separate Class 10.1 is required for each passenger vehicle with a cost in excess of? $30,000.

D.

Disposition of passenger vehicles out of Class 10.1 cannot result in recapture or terminal? loss, and the half year rule does not apply for this class.

 

 

4. The capital cost allowance? (CCA) deduction for any given taxation year is? ________.

Choose the correct answer.

A.

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

B.

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

C.

equal to the amount of depreciation and amortization claimed on its financial accounting reports for the year

D.

reduced by the cost of assets that have been sold or otherwise disposed of

 

5. A proprietorship has a calendar fiscal year and acquires a machine on April 1 of the current year. The machine has a cost of ?$52  500. The proprietor pays a contractor ?$25  000 to install the machine and pays a? non-refundable provincial sales tax of ?$12  000. The machinery is class 8 equipment with a CCA rate of 20?%. Assume that the opening UCC for Class 8 is nil. What is the maximum CCA that can be deducted for this machine in the current? year?

Choose the correct answer.

A.

$8  950

$15  500

C.

$10  500

D.

$17  900

 

6. A proprietor begins operations on April? 1, of the current? year, and has a calendar fiscal year. The proprietorship acquires a machine on December 1 of the current year. The machine has a cost of ?$27  000 and the company incurs ?$7  000 of costs to install the machine. The machine is a class 8 asset with a rate of 20?%. What is the maximum CCA deduction XYZ can take on this asset for the current fiscal? year, from April 1 to December? 31?

Choose the correct answer. ?(Round your answer to the nearest? dollar.)

A.

$2  562

?$5  100

C.

$3  400

D.

$5  400

 

7. A proprietorship commenced operations during the current year on May 1 and will have a calendar fiscal year. On June 1 of the current? year, the proprietorship acquired goodwill for ?$53  000.

Using only this? information, what is the maximum CCA deduction for the current? year?

Choose the correct answer. ?(Round your answer to the nearest whole? dollar.)

A.

$3  710     

B.

$1  325

C.

$889

?$2  650