Wilf Company acquired an additional Class 10 (30% declining balance) asset for $60,000. The UCC at the beginning of the year was $100,000. CCA in the current year is

Question

Quizplus · Accepted Answer

The CCA for Class 10 is calculated as 30% of the undepreciated capital cost (UCC) at the beginning of the year.

UCC at the beginning of the year = $100,000
Additional asset acquired = $60,000

Therefore, the new UCC at the beginning of the year = $100,000 + $60,000 = $160,000

The CCA for the current year = 30% × $160,000 = $48,000

However, since the additional asset was acquired partway through the year, we need to prorate the CCA based on the number of days it was available for use. Assuming a full year of use, the prorated CCA would be:

$48,000 × (365/365) = $48,000

Therefore, the total CCA for the current year is $48,000.

However, since none of the answer choices match exactly, we need to choose the closest option, which is E) $39,000.

Wilf Company Acquired an Additional Class 10 (30% Declining Balance)