- Track The Yearly Adjustments To The Ucc In A Table With The Following Columns Year Adjustment Base Ucc Cca And Rema 1 (50.39 KiB) Viewed 39 times
Churchill Metal Products opened for business in 2002. Its transactions for CCA Class 8 assets over the years are shown in the accompanying table. What CCA amount did Churchill Metal Products claim for the 20 percent UCC account in 2016? Click on the icon to view the transactions for CCA Class 8 assets. Churchill Metal Products claimed a CCA of $ in 2016. (Do not round until the final answer. Then round to the nearest dollar as needed.) Transactions for CCA Class 8 assets. Date Item Activity Amount Machine 1 Purchase $50,000 March 11, 2002 April 24, 2002 November 3, 2005 Machine 2 Purchase $160,000 Machine 3 Purchase $250,000 November 22, 2005 Machine 1 Sale $20,000 May 20, 2009 Machine 4 Purchase $60,000 August 3, 2014 Machine 5 Purchase $345,000 September 12, 2015 Machine 3 Sale $50,000 Print Done X
Only half of the capital cost of acquiring an asset is considered in the CCA in the year of purchase of that asset while the other half is included in the following year. This is commonly referred to as the half-year rule in the CCA system. It is important to note that if an asset is disposed of in the same year that another one in the same CCA class is purchased, the disposal amount (for the class) is subtracted from the purchase amount (for the class) before applying the half-year rule. For any given year, the UCC balance can be calculated as follows. UCC Copening + additions - disposals - CCA = UCC Cending The following table summarizes the half-year rule. Treatment Component Purchase Add only half of the purchase cost of an asset to the base UCC amount for its CCA class in the year of purchase. After the CCA calculation, add the other half to the remaining UCC (Note: The second half is not considered an acquisition in the following year). Disposition Subtract the full amount received for a disposition of an asset from the base UCC amount for its CCA class. Purchases and Subtract total dispositions from total purchases for a CCA. dispositions in class If the remainder is positive, treat it as a purchase. Same year If the remainder is negative, treat it as a disposition. Track the yearly adjustments to the UCC in a table with the following columns: year, adjustment, base UCC, CCA, and remaining UCC. The adjustment column should contain the combined dispositions and purchases for the year. Fill out the adjustments with the given information. There was a net adjustment of $50,000+ $150,000 = $200,000 in 2002, a net adjustment of $260,000 - $10,000 $250,000 in 2005, an adjustment of $60,000 in 2009, an adjustment of $345,000 in 2014, and an adjustment of $30,000 in 2015. The base UCC should be the sum of the remaining UCC from the previous year, plus half of any positive adjustment from the same year, or all of any negative adjustment from the same year. The CCA column should be 20 percent of the value of the base UCC column for the same year. The remaining UCC is the adjustments of this year minus the CCA of this year plus the remaining UCC from the previous year.