Centennial College - ACCT TAXATION Quiz 4 Question1)On January 1, 2019 Jorge purchased two newly constructed rental buildings for $350,000 each

Subject:AccountingPrice:4.01 Bought5

Share With

Centennial College - ACCT TAXATION

Quiz 4

Question1)On January 1, 2019 Jorge purchased two newly constructed rental buildings for $350,000 each. Of the total cost of $350,000 for each building, $100,000 represents the value of the land on which the building is situated. One building contains four suites and is rented to students. The other building is rented to a florist business. Each of the buildings is allocated to a separate Class 1. Net rental revenue (before CCA) for 2019 is $30,000. The maximum CCA deduction for 2019 is:

 

• Question 2

 

 

 

	Nestor Nerd paid $4,000 to purchase various computer applications software for his sole proprietorship, Nerd01 on April 1, 2019. Nerd01 has a December 31 year end and has been operating for 3 years. What is the maximum tax deduction that Nerd01 can claim on the software for the current year?

 

• Question 3

 

	Curt’s Consulting Company purchased a laptop computer on February 15, 2019 for $2,000. The laptop was destroyed in a fire on April 30, 2019 and Curt’s Consulting received $500 in compensation from the insurance company. It was the only asset in the CCA Class as all computer equipment has been leased for the last two years. The effect on Net Income For Tax Purposes for the year ending December 31, 2019 is:

 

 

• Question 4

 

	On December 1 of the current year, Plen Limited purchased a franchise for $70,000. The franchise has a limited life of 15 years. Which one of the following amounts represents the maximum amount of capital cost allowance Plen Limited can deduct for its current year ending on December 31?

 

Question 5

 

	Amazine Inc. purchased Class 8 furniture for $4,000 in 2017. In 2019, this furniture was sold for proceeds of $1,000. The UCC balance in Class 8 was $10,300 at the beginning of 2019 and no Class 8 assets were purchased during the year. What is the UCC of this class at the end of 2019?

 

Question 6

Which of the following statements with respect to terminal losses is NOT correct?

 

QUESTION 7

Fred opened his MacDingle Restaurant franchise on November 1, 2019. He paid $50,000 for the franchise rights and can use them for an unlimited number of years. The restaurant’s fiscal year end is December 31. The maximum CCA deduction was taken for 2019. The Class 14.1 balance on January 1, 2020 is:

 

QUESTION 8

The Nelson Company has a taxation year end of December 31. On January 1 of the current year, the UCC of Class 8 was $80,000. The Nelson Company has a policy of always deducting maximum CCA. An additional class 8 asset was purchased for $20,000 on April 1. Maximum CCA for Class 8 is:

 

 

 

 

 

QUESTION 9

 

ABC Enterprises began operations on September 1 of the current year. It has chosen December 31 as its year end. On October 1 of the current year, the proprietorship purchased furniture and fixtures for $40,000. The maximum capital cost allowance on the furniture and fixtures for the current year ending December 31 will be:

 

QUESTION 10

On September 1, 2019, Lerner Ltd, purchased a franchise for $75,000. The franchise has a limited life of 10 years. Lerner Ltd. has a September 30 year end. The maximum tax deduction related to the franchise for the year ending September 30, 2019 is: