Question

A piece of newly purchased industrial equipment costs $1,000,000. It is Class 8 property with a CCA rate of 20%.

Calculate the annual CCA and end-of-year book values (UCC) for the first five years. (Omit $ sign in your response.)

Year	CCA	Ending UCC
1	$	$
2	$	$
3	$	$
4	$	$
5	$	$

Answer 1

Calculate CCA and end-of-year book values of the equipment as follows: Here, investment value (equipment) is I and CCA rate is d. Year CCA Id = $1,000,000 x 20% = $200,000 End of book values Value = I - CCA = $1,000,000 - $200,000 = $800,000 Value = Value - CCA = $800,000 - $160,000 = $640,000 Id(1-d) = $1,000,000 x 20%(1-20%) = 200,000x(0.80) = $160,000 Id(1-d)? = $1,000,000 20%(1–20%)? = 200,000x(0.80) = $128,000 Id(1-2)' = $1,000,000 x 20%(1–20%) = 200,000x(0.80) = $102,400 Id(1-d)* = $1,000,000 > 20%(1–20%)* = 200,000x(0.80) = $81,920 Value =Value, - CCA = $640,000-$128,000 = $512,000 Value, =Value, - CCA = $512,000 - $102,400 = $409,600 Valuez = Value, - CCA = $409,600 - $81, 920 = $327,680