Question

The following information is related to Class 14.1 assets for the year 2020.

Balance at the beginning of the​ year: ​$53,000
Purchased goodwill during the year for ​$21,500.
Sold various intangible properties included in Class 14.1 for ​$13,000 ​(Assume the original cost of disposed property is ​$32,000​.)
What is the maximum CCA in 2020​?

A. ​$4,135
B. ​$3,288
C. ​$2,863
D. ​$3,075

Answer 1

The maximum CCA in 2020 can be calculated by subtracting the proceeds from the sale of the disposed property from the original cost of that property and adding the purchased goodwill. However, none of the given options match the correct result.

Step-by-step explanation:

The maximum Capital Cost Allowance (CCA) in 2020 can be calculated by considering the balance at the beginning of the year, the purchased goodwill, and the sale of intangible properties included in Class 14.1. The CCA is calculated by subtracting the proceeds from the sale of the disposed property from the original cost of that property. In this case, the original cost of the disposed properties is $32,000 and the proceeds from the sale are $13,000, so the CCA is $19,000.

Additionally, the purchased goodwill of $21,500 is also added to the CCA calculation. Therefore, the maximum CCA in 2020 is $19,000 + $21,500 = $40,500.

None of the options provided match this result, so none of the given options is the correct answer.