Five years ago, Ottawa Styling Institute bought a hair straightening machine for $200,000.Assume the machine is the only asset in its class.The company has just sold the machine for $235,000.The UCC of the asset class just before the sale is $85,000.In terms of total amounts, the total taxable items of this sale are:

Question

Quizplus · Accepted Answer

To calculate the taxable items, we need to determine the gain or loss on the sale of the asset. 
The gain is the selling price ($235,000) minus the adjusted cost basis, which is the UCC ($85,000). 
Gain = $235,000 - $85,000 = $150,000 
Therefore, the taxable amount is the gain, which is $150,000. 
However, since the asset was held for more than one year, it qualifies for a long-term capital gain tax rate, which is generally lower than the regular income tax rate. 
Assuming a long-term capital gain tax rate of 15%, the taxable amount would be $150,000 x 0.15 = $22,500. 
However, since the question asks for the total taxable items (not just the tax on the gain), the answer is the total selling price, which is $235,000. 
Therefore, the best choice is D.

Five Years Ago, Ottawa Styling Institute Bought a Hair Straightening