A $40,000 asset was purchased and classified as a Class 10 asset for CCA purposes. If the CCA rate is 30%, calculate UCC for the end of year 1.

Question

Quizplus · Accepted Answer

The UCC (Undepreciated Capital Cost) at the end of year 1 is calculated by subtracting the CCA (Capital Cost Allowance) from the original cost of the asset. The CCA for the first year is 30% of $40,000, which is $12,000. Therefore, the UCC at the end of year 1 is $40,000 - $12,000 = $28,000. However, given the options provided, it appears there was a mistake in the question or in the interpretation of the options. Based on the calculation method described, none of the provided options correctly matches the calculated UCC of $28,000. Given the options, the closest approach to explaining the correct calculation was intended, but it seems there was an error in the provided choices or in the calculation explanation.

A $40,000 Asset Was Purchased and Classified as a Class