Wolfe Ltd. has a December 31 year end. It purchased a Class 10.1 automobile four years ago for $38,000. On January 1, 2020, the undepreciated capital cost for this Class 10.1 was $12,900. During 2020, it was sold for $10,000. What is the effect on Net Income For Tax Purposes of this sale?
A)No effect.
B)Terminal loss of $2,900.
C)Capital loss of $2,900.
D)CCA deduction of $1,935.

Question

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The Answer of Wolfe Ltd. has a December 31 year end. It purchased a Class 10.1 automobile four years ago for $38,000. On January 1, 2020, the undepreciated capital cost for this Class 10.1 was $12,900. During 2020, it was sold for $10,000. What is the effect on Net Income For Tax Purposes of this sale?
A)No effect.
B)Terminal loss of $2,900.
C)Capital loss of $2,900.
D)CCA deduction of $1,935.

Wolfe Ltd Has a December 31 Year End