SWE Ltd., a public company, enters into a lease of office space in Year 1. The lease covers a six-year period with no renewal options. Early in Year 1, the company paid $75,000 for leasehold improvements. In Year 2, another $12,000 was spent on carpeting some of the offices. Which of the following statements is true?

 

 

a. Maximum CCA for Year 1 is $22,500.

b. 

Maximum CCA for Year 2 is $16,100

 

c. Maximum CCA for Year 2 is $12,500.

 

d. Beginning UCC in Year 2 is $60,000.

Answer rating: 100% (QA)

To determine the correct statement we need to understand the concept of Capital Cost Allowance CCA and how it applies to leasehold improvements CCA is ... View the full answer