Frankie purchased a freehold townhouse which she used to generate rental income. She originally acquired the unit at cost of $350,000. Over the years, she had claimed $27,000 in CCA, such that her UCC at the beginning of the year was $323,000. This year, she sold the unit for $325,000. She incurred selling expenses of $5,000. Frankie purchased another rental property before the end of the year for $225,000. What statement is true? Oa) Frankie has neither a recapture, nor a terminal loss. Ob) Frankie has a terminal loss of $3,000. Oc) Frankie has a recapture of $25,000. O d) Frankie has a terminal loss of $5,000.
Frankie purchased a freehold townhouse which she used to generate rental income. She originally acquired the unit at cost of $350,000. Over the years, she had claimed $27,000 in CCA, such that her UCC at the beginning of the year was $323,000. This year, she sold the unit for $325,000. She incurred selling expenses of $5,000. Frankie purchased another rental property before the end of the year for $225,000. What statement is true? Oa) Frankie has neither a recapture, nor a terminal loss. Ob) Frankie has a terminal loss of $3,000. Oc) Frankie has a recapture of $25,000. O d) Frankie has a terminal loss of $5,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Frankie purchased a freehold townhouse which she used to generate rental income. She originally acquired
the unit at cost of $350,000. Over the years, she had claimed $27,000 in CCA, such that her UCC at the
beginning of the year was $323,000. This year, she sold the unit for $325,000. She incurred selling
expenses of $5,000. Frankie purchased another rental property before the end of the year for $225,000.
What statement is true?
Oa) Frankie has neither a recapture, nor a terminal loss.
Ob) Frankie has a terminal loss of $3,000.
Oc) Frankie has a recapture of $25,000.
O d) Frankie has a terminal loss of $5,000.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F64e04c1c-889f-4313-bd1c-ee69bec9fa10%2Fae7f0132-1098-41ca-8a82-dccaa4281fb4%2Flkllyho_processed.jpeg&w=3840&q=75)
Transcribed Image Text:4
0
Frankie purchased a freehold townhouse which she used to generate rental income. She originally acquired
the unit at cost of $350,000. Over the years, she had claimed $27,000 in CCA, such that her UCC at the
beginning of the year was $323,000. This year, she sold the unit for $325,000. She incurred selling
expenses of $5,000. Frankie purchased another rental property before the end of the year for $225,000.
What statement is true?
Oa) Frankie has neither a recapture, nor a terminal loss.
Ob) Frankie has a terminal loss of $3,000.
Oc) Frankie has a recapture of $25,000.
O d) Frankie has a terminal loss of $5,000.
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