Question

In: Accounting

Determine the maximum amount of Class 13 CCA that the Company can deduct for 2019 and 2020.

Roden Ltd. has a December 31 year-end. The Company leases its office space under a lease signed on January 1, 2015.  The lease term is 5 years, with an option to renew at an increased rent for an additional 2 years. In 2015, the Company spent $74,000 renovating the premises.  In 2019, changing needs require the Company to spend another $16,000 renovating the space. Determine the maximum amount of Class 13 CCA that the Company can deduct for 2019 and 2020.

Solutions

Expert Solution

The required CCA calculations for 2019 would be as follows:

     On 2015 Improvements ($74,000  ÷  7)......................................$10,571

     On  2019  Improvements  [(150%)($16,000   3)]........................8,000

     2019 CCA.................................................................................................$18,571

 

The required CCA calculations for 2020 would be as follows:

     On 2014 Improvements ($74,000  ÷  7).....................................$10,571

     On 2019 Improvements ($16,000  3).............................................5,333

      2020 CCA..............................................................................................$15,904

The maximum amount of Class 13 CCA that the Company can deduct for 2019 is $18,571 and for 2020 is $15,904.

Renze Joy Candido answered 2 years ago
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