You are part of the audit team examining the books of the X Company. You are responsible
Question:
You are part of the audit team examining the books of the X Company. You are responsible for preparing the CCA Schedule for the team.
You obtained the information below regarding the fixed assets of the Company.
i. The undepreciated capital cost balances at December 31st.2020, were as follows:-
Class #3(5%)…………………………………………………………………….$550,000
Class #8(20%)………………………………………………………………….. 35,000
Class#10(30%)………………………………………………………………….. 9,200
Class #44(25%)…………………………………………………………………… 15,000
Purchases and sales made during 2021 were as follows:-
a. The Class #3 building was acquired in 1986 for $1,100,000. It was sold in 2021 for $800,000 and was the last asset in the Class. It was replaced with a Class #1 building (4%) costing $1,200,000.
b. The Company purchased a new fax machine for $1,200
c. Some outdated desks used by the finance department with a cost of $5,000 were sold for proceeds of $3,500 and replaced with four new desks for a total cost of $6,000.
d. A 20-year patent to use a manufacturing process was purchased on July 1st. 2021 for $120,000.
e. A Company car for use by the president of the company was purchased for $40,000 before HST. This car replaced the only other existing company car, which was purchased in 2017 for $35,000. The old car was sold for $12,000.
Required:
Prepare a CCA schedule and indicate what would be the addition(s) and deletion(s) to the Business Income Statement in 2021.
