Tax Question 17 (2 points) Kinnetics Inc. purchased Equipment Z for $25,000 on J

Question

Tax

Question 17 (2 points) Kinnetics Inc. purchased Equipment Z for $25,000 on January 2, 2015. Kinnetics is subject to a 25% tax rate and all of Kinnetics, depreciable assets are Class 10 with a CCA of 30%. Kinnetics Inc. beginning UCC is $90,000 in 2016. In 2016, Kinnetics Inc. replaced Equipment Z with Equipment Z+. It was able to sell Equipment Z for $21,500 and Equipment Z+ cost $27,000. What is the hypothetical recapture CCA or additional UCC allowance on Equipment Z that was sold (calculate this value even though it may not be necessary to actually make a tax adjustment in this year)? (for recapture tax put a negative sign before the dollar sign and for additional allowance write out the number as is. For example, if you get recapture CCA of $25,000 then enter it as -$25,000 and if you get additional UCC allowance of $40,000 then enter it as $40,000)?

Explanation / Answer

Calculation Of UCC Allowance/ Recapture CCA

Begining Balance of UCC= $90000

Add: Purchase of Z+ Cost= $27000

Less: Sale Value of Z =($21500)

(Lower of $25000 and $21500)

UCC Balance After Disposition =$95500

Additions To UCC = $5500.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.