Montreal Metal Inc. manufactures store fixtures for large retailers in North America. Its plant i...

Montreal Metal Inc. manufactures store fixtures for large retailers in North America. Its plant is located in Montreal and the company has a December 31 year-end. Its UCC balances on January 1, 2020 are as follows:

Class 1 (acquired in 2008) 1,000,000

Class 3 500,000

Class 8 400,000

Class 10 34,000

Class 10.1 12,000

Additional Information:

During the year ended December 31, 2020, the company had the following transactions:

1) The company made $11,000 of renovations to the leased warehouse in Montreal on January 1,2020. The lease is for ten years with two successive options to renew of five years each.

2) The company got many new accounts during the year. Due to the large expansion, Montreal Metal Inc. was experiencing, the company moved into a new building during the year. The new building cost $4,200,000, of which $1,200,000 was the cost of the land. The building is used 95% for production purposes and 5% for administrative purposes based on the square footage. The company also sold its old 1981 building for $1,050,000 (originally cost $550,000).

3) The company sold its last rolling stock for $26,000, which had cost $55,000. This old Dodge delivery truck was the only asset remaining in the class.

4) The company traded in its BMW SUV used by the company’s president for $30,000, in exchange for an Audi SUV costing $65,000.

5) On January 1,2020, the company acquired a 2-year patent for $40,000.

6) The company purchased a photocopy machine for $20,000 on January 28, 2020.

7) On August 30, 2020, the company purchased $140,000 of spare machinery parts in the event its production equipment needed repairs in order to keep it operational.

8) On January 31,2020, the company also acquired 9 computers for $25,000.

9) The company incurred $7,000 in legal fees to amend its articles of incorporation.

10) The company upgraded its office furniture by selling its worn equipment (which had a cost of $42,000) for $10,000. It bought new office furniture for $50,000.

Required: Utilize all elections to minimize tax and calculate the maximum Capital Cost Allowance (CCA) for each class of depreciable asset and, if applicable, any terminal loss or recapture for the year ending December 31, 2020. In addition, list any transaction(s) not subject to CCA.

all these 13 points need to be answer if Applicable. calculation required.
 

Transcribed Image Text:

1. 2. 3. 4. 36000 5. 6. 7. 8. 9. 10. 11. 12. 13. Class 1 Class 3 Class 8 Class 8 (Election) Class 10 Class 10 (Election) Class 10.1 Class 10.1 Class 13 Class 14 (Election) Class 14.1 Class 50 Transaction(s) not subject to CCA Indicate the quantum of CCA, Recapture, terminal loss if any 1. 2. 3. 4. 36000 5. 6. 7. 8. 9. 10. 11. 12. 13. Class 1 Class 3 Class 8 Class 8 (Election) Class 10 Class 10 (Election) Class 10.1 Class 10.1 Class 13 Class 14 (Election) Class 14.1 Class 50 Transaction(s) not subject to CCA Indicate the quantum of CCA, Recapture, terminal loss if any

Answer rating: 100% (QA)

1 class 1 1000000 2 class 3 500000 3 class 8 400000 4 class 8 election 0 5 class 10 34000 6 class 10 ... View the full answer