Jim Smith Owns a Rental Property Which Had a UCC

question 3

Multiple Choice

Jim Smith owns a rental property which had a UCC of $85,000 at the beginning of 20x0. After all allowable expenses other than CCA, Jim's total rental income was $1,000 in 20x0 and $10,000 in 20x1. Jim always deducts the maximum CCA allowed. What is the UCC for his rental property at the end of 20x1? (The property is a Class 1 building amortized at 4%.)

• A) $78,336
• B)$80,640
• C) $84,000
• D) $85,000

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Definitions:

Capital Surplus

The amount by which a company's total capital exceeds the par value of its issued share capital.

Paid-in Capital

Funds raised by a company through the sale of common or preferred stock.

Preferred Stock

A type of stock that provides a fixed dividend before any dividends are paid to common stockholders and typically has no voting rights.

Common Stock

Represents ownership shares in a corporation, giving holders voting rights and a share in the company's profits through dividends.