What is the undepreciated capital cost of Question 57's $800,000 asset after five CCA calculations of 30% declining balance, with the half-year rule?
A)$0
B)$240,000
C)$163,268
D)$145,564

Question

Quizplus · Accepted Answer

The undepreciated capital cost (UCC) is the original cost of the asset minus any depreciation taken so far.

For the first year, the half-year rule means only half the rate of depreciation can be taken, so the CCA deduction would be: 
$800,000 x 30% x 0.5 = $120,000

Therefore, the UCC after the first year would be: 
$800,000 - $120,000 = $680,000

For the second year, the calculation would be: 
($680,000 x 30%) = $204,000

UCC: $680,000 - $204,000 = $476,000

For the third year: 
($476,000 x 30%) = $142,800

UCC: $476,000 - $142,800 = $333,200

For the fourth year: 
($333,200 x 30%) = $99,960

UCC: $333,200 - $99,960 = $233,240

For the fifth year: 
($233,240 x 30%) = $69,972

UCC: $233,240 - $69,972 = $163,268

Therefore, the answer is C) $163,268

What Is the Undepreciated Capital Cost of Question 57's $800,000