Quiz 2 October 2020, questions and answers PDF

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Curt s Consulting Company purchased a laptop computer on February 15, 2019 for $2,000. The laptop was destroyed in a fire on April 30, 2019 and Curt s Consulting received $500 in compensation from the insurance company. It was the only asset in the CCA Class as all computer equipment has been leased for the last two years. The effect on Net Income For Tax Purposes for the year ending December 31, 2019 is: A. $550 decrease. B. $412.50 decrease. C. $2,000 decrease. D. $1,500 decrease. E. None of the above

Robert bought a rental property ten years ago for $320,000, with $80,000 of the purchase price allocated to the land. Over the ten years, he claimed CCA such that his UCC at the beginning of this year for the building was $196,000. Robert sold the property this year for $520,000, with $180,000 of the sale price allocated to the land. Which of the following statements is correct? A. Robert has recapture of $44,000. B. Robert has recapture of $124,000. C. Robert has recapture of $144,000. D. Robert has a capital gain of $100,000. E. None of the above

The capital cost of an asset includes a number of costs. Indicate which cost would NOT be considered part of the capital cost. A. Legal fees incurred to acquire the asset. B. Duties paid on the asset. C. Fire and theft insurance paid on the asset. D. Non-refundable provincial sales taxes paid on the asset. E. None of the above

On December 1 of the current year, Plen Limited purchased a franchise for $70,000. The franchise has a limited life of 15 years. Which one of the following amounts represents the maximum amount of capital cost allowance Plen Limited can deduct for its current year ending on December 31? A. 396 B. 594 C. 4667 D. 7000 E. None of the above

A business has Net Income For Tax Purposes before deducting CCA of $15,000. It would like to reduce this total to nil after the deduction of CCA. It can take the required $15,000 in CCA from four CCA classes, all of which have a balance of more than $15,000. If the business wishes to maximize future CCA, the $15,000 should be deducted from: A. Class 44 B. Class 10 C. Class 53 D. Class 8 E. None of the above...