ACCT226 MCQ and Answer Chapter 5 #1 PDF

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Summary

Questions 1 To 10 The Nelson Company has a taxation year end of December 31. On January 1 of the current year, the UCC of Class 8 was $80,000. The Nelson Company has a policy of always deducting maximum CCA. Each of the independent Parts of this question deal with transactions during the current yea...

Description

Questions 1 To 10 The Nelson Company has a taxation year end of December 31. On January 1 of the current year, the UCC of Class 8 was $80,000. The Nelson Company has a policy of always deducting maximum CCA. Each of the independent Parts of this question deal with transactions during the current year which involved Class 8 assets. Choose one of the following answers for each Part (individual answers can be used more than once).

A. $4,000

I. $43,200

Q. $5,000 Recapture

B. $10,000

J. $52,000

R. $10,000 Recapture

C. $10,800

K. $60,800

S. $5,000 Terminal Loss

D. $32,000

L. $67,000

T. $10,000 Terminal Loss

E. $13,000

M. $72,000

U. $5,000 Allowable Capital Loss

F. $22,000

N. $76,000

V. $10,000 Allowable Capital Loss

G. $25,000

O. $91,000

W. $5,000 Taxable Capital Gain

H. $20,000

P. $98,000

X. $10,000 Taxable Capital Gain

1.

An additional class 8 asset was purchased for $20,000 on April 1. Maximum CCA for Class 8 is:

2.

An asset with a capital cost of $15,000 was sold for $4,000 on June 30. Minimum UCC on January 1 of the following year is:

3.

An asset with a capital cost of $15,000 was sold for $26,000 on September 1. Maximum CCA for Class 8 is:

4.

An asset with a capital cost of $15,000 was sold for $26,000 on September 1. Minimum UCC on January 1 of the following year is:

5.

An asset with a capital cost of $100,000 was sold on June 30 for $90,000. Also during the year, an asset was purchased for $60,000. Maximum CCA for Class 8 is:

6.

The last asset in the class, with a capital cost of $85,000, was sold on July 15 for $90,000. This would give rise to:

7.

The last asset in the class, with a capital cost of $85,000, was sold on August 1 for $70,000. This would give rise to:

8.

An asset with a capital cost of $40,000 was sold for $50,000 on September 1. This would give rise to:

9.

An asset with a capital cost of $70,000 was sold on October 1 for $90,000. An asset was purchased on November 1 for $100,000. Maximum CCA for Class 8 is:

10. An asset with a capital cost of $70,000 was sold on May 1 for $90,000. An asset was purchased on May 15 for $100,000. Minimum UCC on January 1 of the following year is:

1.

F.

$22,000 [20%][$80,000 + (150%)($20,000)]

2.

K.

$60,800 [$80,000 - $4,000 - (20%)($80,000 - $4,000)].

3.

E.

$13,000 [(20%)($80,000 - $15,000)].

4.

J.

$52,000 [$80,000 - $15,000 - (20%)($80,000 - $15,000)].

5.

B.

$10,000 [(20%)($80,000 - $90,000 + $60,000)].

6. Q.

Recapture of $5,000. ($80,000 – 85,000)

7. T.

$10,000 terminal loss. ($80,000 – 70,000)

8. W.

$5,000 taxable capital gain. ($50,000 – 40,000) x 50%

9. G.

$25,000 [20%][$80,000 - $70,000 + $100,000 + (0.5)($100,000 - $70,000)].

10. O.

$91,000 ($80,000 - $70,000 + $100,000 - $19,000 CCA)....