Homework Answers
Automobiles which are not treated as passenger vehicles are allowable up to maximum CCA of 30%
But during the first year, The CCA allowed is only 50% of the Max Allowable CCA
In the Given case the CCA allowed is 50% 0f 30% in the First Year
Hence CCA allowed is 15% (Answer to Question a)
B-1: Allowable CCA in year -1 due to addition in of automobiles in year-1
$95,000 X 30% X 50% = $ 14,250
B-2: Allowable CCA in year -2 due to addition in of automobiles
the CCA will be calculated on the Reducing Balance
CCA for Year 2 = ($95,000-$14250) X 30%
= $ 24,225
C: Difference in CCA rate if the investment was in Machinery instead of Automobiles :
0% as the CCA for investment in eligible machinery is also 30%
(Note: Answered 3 questions as required questions are not mentioned as HOMEWORKLIB Guidelines)
Thank You
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