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.
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