The business has CEC balance $20,000 at the beginning of the year and sold a cus

Question

The business has CEC balance $20,000 at the beginning of the year and sold a customer list. The followings are incurred during the year, please determine the maximum CEC amt.Expenses include:Fines and penalties        $2,000

Cost of government rights                    $3,900

Appraisal costs associated with eligible capital property not purchased                    $1,550

Cost of business license (with unlimited life)        $2,750

Cost of customer lists        $1,800

The disposition involves a customer list with proceed      $5,000

}Calculate CEC deduction for the year and the balance in the business’s CEC account at the end of the year :

Opening balance in CEC account:Ation in the year

Explanation / Answer

total expense=2000+3900+1550+2750+1800+5000=$17,000

out of this 100% if this is included to begining amount =20,000+17,000=$37,000

CEC deduction at end of year=5% of 37,000= $1,850

Balance at end of year=37,000-1850=$35,150

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