During 2019, XYZ Inc.bought a tractor for $50,000, which belongs in class 10 with a CCA rate of 30%.Assuming that the tractor is the only asset in the class, what is the maximum CCA that XYZ Inc.can claim for 2020 with respect to the tractor ?
A)$7,500
B)$22,500
C)$8,250
D)$15,000

Question

Quizplus · Accepted Answer

The maximum CCA for 2020 is calculated based on the declining balance method. In the first year (2019), the half-year rule applies, allowing for a 15% deduction ($50,000 * 15% = $7,500), leaving a remaining balance of $42,500. For 2020, the full 30% rate applies to the remaining balance, so the CCA is $42,500 * 30% = $12,750. However, none of the provided options match this calculation, suggesting a possible mistake in the calculation or interpretation of the question. Given the options, the closest to the expected calculation based on the provided information is $8,250, which might indicate a misunderstanding in the calculation process or an error in the question's options.