On March 1, 2011, Jennifer Lobo began operating as a sole proprietorship and purchased the licence to manufacture the computer software version of the latest trivia game, "Tax is a Microcosm of Life on CD". She acquired the following assets:
Manufacturing equipment.................................... $20,000
Tools (each costing under $500)............................... 16,000
Dies and moulds................................................... 8,000
Computer equipment and systems software.................. 12,000
Photocopier ........................................................ 6,000
Office furnishings................................................ 15,000
Customer lists (expected to be used indefinitely) ............. 4,000
Delivery van....................................................... 28,000
TV commercial video tape....................................... 22,000
Chairs and tables (for the employee eating area)................ 2,500
Cutlery and dishes (for the employee eating area)...............2,000
Table linens (for the employee eating area)........................1,200
Automobile (for use by sales personnel visiting clients)........38,000
Licence to manufacture, based on patented information, "Tax is a Microcosm
of Life on CD" for three years ending February 29, 2014......30,000
Made improvements on the building that she leased on March 1, 2011;
the lease was for three years with two successive options to renew of
three years and four years.............................................9,000
During 2012, she made the following additional purchases and disposals:
Bought a new brick building and land in May to be used 95% for
manufacturing; an appraisal indicated that the building represented
45% of the total cost of the property.......................... $200,000
Sold the photocopier................................................ (4,000)
Sold the automobile ................................................ (23,000)
Sold the TV commercial video tape.............................. (18,000)
Sold some of the tools (costing less than $500 each)......... (5,000)
REQUIRED
Prepare a schedule to show the maximum capital cost allowance for the fiscal years ended December 31, 2011 and December 31, 2012, ignoring HST considerations. Where choices are available, state the reasons for your decision. Ignore the effects, if any, of a leap year.