Scott Inc. closes its books on December 31 of every year.

 The following information on its assets was contained in the records of the business as follows:

Class 1  During 2019, a new office building was acquired at a total cost of $623,000.  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 (6%).

Class 8  The January 1, 2019 UCC balance in this Class was $346,000.  During 2019, the Company acquired Class 8 assets at a cost of $105,000.  Class 8 assets with a capital cost of $83,000 were sold for proceeds of $75,000.  None of the individual assets sold had proceeds that exceeded their individual capital cost.

Class 10  The January 1, 2019 UCC balance in this Class was $150,000.  During 2019, 3 passenger vehicles were acquired at a cost of $25,000 each.  In addition, a delivery van with a capital cost of $42,000 was sold for $18,000.

In 2019, Scott sold the only building he owns for proceeds of $610,000. He purchases this building years ago for $540,000 ($350,000 for the land. Also, of the sale price $500,000 consider as the sale price of the land). UCC balance at Jan 1, 2019 was $120,000. Building in class 1, 4%.

Class 13  The January 1, 2019 balance in this Class was $42,500, reflecting improvements that were made in 2017, the year in which the lease commenced.  These improvements were made on a property leased as office space for the Company’s executives.  The basic lease term is for 8 years, with an option to renew for a period of 2 years.  Additional improvements, costing $40,000, were made during 2019.

Required:

Calculate the maximum CCA that Scott Enterprise can deduct for 2019. Also, calculate any other Tax consequences for the year. You can record your solutions on the CCA schedule provided.

Answer rating: 100% (QA)

Solution I tried creating a new schedule since it was not provided I hope t... View the full answer