Lou Silva has owned and operated The Wellness Store for fifteen years. The company's year-end is December 31st. The following chart lists the company's assets owned prior to 2021 and their UCC balances at the end of 2020. Asset UCC Balance Store (building purchased in 2005) $100,000 Delivery van (Class 10) 15,000 Furniture and office equipment (Class 8) 30,000 Photocopier purchased in 2019 (Separate Class 8) 2,000 Patent (purchased in 2018) 10,000 The following transactions took place in 2021: a. Lou purchased $2,000 worth of small tools (each costing under $500). b. The delivery van was sold for $12,000. The original cost was $20,000. A second-hand van was purchased in the year for $16,000. c. $15,000 was paid for an air conditioning system in the building, which was added to the cost of the standard Class 1 pool. d. Lou sold the photocopier for $1,500 in the year, and will replace it in January 2022 with a second-hand model valued at $1,700. e. Lou amortizes the patent in Class 44. f. The business acquired a franchise on March 1 st of 2021 for $55,000. The franchise has a limited legal life of 20 years. (Ignore leap year effects.) Calculate the following: 1) the total CCA that Lou will be able to claim in 2021. 2) any recapture and/or terminal loss that occurred during the year.
Lou Silva has owned and operated The Wellness Store for fifteen years. The company's year-end is December 31st.
The following chart lists the company's assets owned prior to 2021 and their UCC balances at the end of 2020.
|
Asset |
UCC Balance |
|
Store (building purchased in 2005) |
$100,000 |
|
Delivery van (Class 10) |
15,000 |
|
Furniture and office equipment (Class 8) |
30,000 |
|
Photocopier purchased in 2019 (Separate Class 8) |
2,000 |
|
Patent (purchased in 2018) |
10,000 |
The following transactions took place in 2021: a. Lou purchased $2,000 worth of small tools (each costing under $500). b. The delivery van was sold for $12,000. The original cost was $20,000. A second-hand van was purchased in the year for $16,000. c. $15,000 was paid for an air conditioning system in the building, which was added to the cost of the standard Class 1 pool. d. Lou sold the photocopier for $1,500 in the year, and will replace it in January 2022 with a second-hand model valued at $1,700. e. Lou amortizes the patent in Class 44. f. The business acquired a franchise on March 1 st of 2021 for $55,000. The franchise has a limited legal life of 20 years. (Ignore leap year effects.)
Calculate the following: 1) the total CCA that Lou will be able to claim in 2021. 2) any recapture and/or terminal loss that occurred during the year.
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