Tex Corporation trades in a Class 10 (30%) asset during the current year. The opening UCC balance in the Class 10 pool is $420,000. Tex trades in an asset for $25,000, which is deducted from the $125,000 price of the new machine (also Class 10). The appropriate tax rate is 35% and the nominal after-tax rate of return is 10%.
Required: Calculate the UCC at the end of the year for class 10.

Question

Quizplus · Accepted Answer

The Answer of Tex Corporation trades in a Class 10 (30%) asset during the current year. The opening UCC balance in the Class 10 pool is $420,000. Tex trades in an asset for $25,000, which is deducted from the $125,000 price of the new machine (also Class 10). The appropriate tax rate is 35% and the nominal after-tax rate of return is 10%.
Required: Calculate the UCC at the end of the year for class 10.

Tex Corporation Trades in a Class 10 (30%) Asset During