Reference no: EM133029014

Question - George's Portable Signs (GPS) makes and installs portable signs for a variety of businesses. The business is owned by George Black. GPS currently operates out of two locations: a new building that GPS owns, and a leased warehouse space where unused signs are stored. GPS has provided the following information about the capital assets used in the business:

On January 1, 2020, the undepreciated capital cost (UCC) for each class of assets was as follows:

Class 1 - building: $220,000

Class 8 - office furniture and equipment: $60,000

Class 10.1 - George's car: $12,495

Class 13 - leasehold improvements: $19,500

The building, which cost $250,000 in 2006, was sold for $195,000 during 2020. This building was on leased land. It was the only building in Class 1 at the time of its sale. A new building with land was purchased for $600,000, with $100,000 allocated to the land. In this new building, 80% of the floor space is used for manufacturing signs and 20% is office space.

The opening balance in Class 13 represents leasehold improvements of $27,000 made to the leased warehouse during 2017. During 2020, further leasehold improvements were made to the same leased warehouse at a cost of $45,600. The lease was signed in 2017 for a term of five years, with two successive four-year renewal terms.

During the year, GPS purchased a passenger vehicle for the business. The vehicle was a replacement for the Class 10.1 vehicle driven by George. The old vehicle was sold for $20,000. The replacement vehicle cost was $52,000.

Required - Determine the maximum capital cost allowance (CCA) deduction for GPS for the year. Show opening and ending UCC as well as any additions and disposals, CCA, terminal losses, recapture, and capital gains that result from the information provided.

Note: Round all amounts to the nearest dollar and ignore GST and provincial taxes. Show all steps in your calculations, even if the result is zero.