Reference no: EM133066773
Question - ABC Enterprises was incorporated in 1988. The company closes its books on December 31 of each year and on January 1, 2020, the following information on depreciable assets was contained in its records.
|
Type of Asset
|
Class
|
Undepreciated Capital Cost
|
Original Capital Cost
|
|
Equipment
|
8
|
$2,100
|
$26,000
|
|
Building
|
1
|
205,000
|
250,000
|
|
Automobile
|
10
|
10,200
|
20,500
|
The building total original cost was $350,000, including $100,000 land cost. During the 2020 fiscal year, the following transactions occur:
Sale Of Equipment - As the result of an extensive analysis, it is decided that it would be better to sell the existing equipment and to replace it with improved equipment that will be leased. The equipment is sold for $21,000.
Sale Of Building - the building is sold for $190,000 and replaced with leased premises.
Sale and Purchase of Automobile - The automobile is sold during the current year and replaced with a new truck. The sale proceeds for the automobile were $22,500, and the new truck cost $30,000
Leasehold Improvement: $100,000 improvement. The lease term for the Building was 5 years, with one renewal option for another 5 years.
Required - For the tax year ended December 31, 2020 calculate the CCA that can be deducted by the company and the ending UCC balances. Also, indicate any other tax consequences from the information given.