During 2018, a new office building was acquired at a total cost of $723,000. Of this total, it is estimated that the value of the land is $145,000. The building will be used 100 percent for non-residential activities, none of which involve manufacturing. It will be allocated to a separate Class 1. (1) Calculate the maximum CCA (2) Determine the UCC (3) determine the amount of any capital gain, recapture, or terminal loss
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
During 2018, a new office building was acquired at a total cost of $723,000. Of this total, it is estimated that the value of the land is $145,000. The building will be used 100 percent for non-residential activities, none of which involve manufacturing. It will be allocated to a separate Class 1.
(1) Calculate the maximum CCA
(2) Determine the UCC
(3) determine the amount of any
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