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 and XYZ Inc.claims maximum CCA each year, what is the UCC (undepreciated capital cost)for the class after CCA is claimed at the end of 2020?
A)$30,750
B)$27,500
C)$19,250
D)$50,000

Question

Quizplus · Accepted Answer

In the first year, XYZ Inc. can claim CCA equal to the UCC of the class multiplied by the CCA rate, which is $50,000 x 30% = $15,000. 
At the end of the first year, the UCC for the class is $50,000 - $15,000 = $35,000. 
In the second year, XYZ Inc. can claim CCA equal to the UCC of the class multiplied by the CCA rate, which is $35,000 x 30% = $10,500. 
At the end of the second year, the UCC for the class is $35,000 - $10,500 = $24,500. 
Therefore, the UCC for the class after CCA is claimed at the end of 2020 is $24,500, which is answer choice C.