Green Business Ltd

question 5

Essay

Green Business Ltd. (GBL)began operating ten years ago, and has always claimed maximum CCA. The company has a December 31st year-end.
The following information is known about GBL's capital assets:
The undepreciated capital cost in Class 8 was $10,000 at the end of 20x1. None of the assets in the c purchased in 20x1.
In 20x2, GBL expanded into the manufacturing of recycle bins and purchased a Class 43 asset for $5 The undepreciated capital cost in Class 10 was $12,000 at the end of 20x0. Due to the company's
growth, GBL sold the only asset in the pool (a small pickup truck)on December 20th of 20x1 for
$5,000. On the same day, GBL spent $8,000 on a slightly larger used truck to use temporarily until an appropriate work truck could be found in the upcoming year. The company did not conduct any business activities between December 20th, 20x1 and January 2nd, 20x2.
Required:
Calculate the net increase or decrease in GBL's net income for tax purposes for 20x2 if the maximum claimed.
Based strictly on the information provided, what tax advice would have been beneficial for GBL in 2 order to minimize the company's net income for tax purposes?

---

Definitions:

Failure to Adhere

A lack of compliance or failure to follow agreed-upon rules, regulations, or conditions.

Seize Property

The act of taking possession of property, often by legal authority, due to legal judgment or law enforcement action.

Attach Funds

A legal process where a creditor seeks court permission to seize the funds of a debtor from a bank account or similar resource to satisfy a debt.

Creditor

A person or entity to whom money is owed by another (the debtor), typically arising from a transaction of credit or loan.