A $40,000 Asset Was Purchased and Classified as a Class

question 60

Multiple Choice

A $40,000 asset was purchased and classified as a Class 10 asset for CCA purposes. If the CCA rate is 30%, calculate UCC for the end of year 5.

• A) $4,929
• B) $5,030
• C) $6,141
• D) $7,252
• E) $8,163

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Definitions:

Significant Influence

The power to participate in the financial and operating policy decisions of an investee, but not control them, often associated with ownership of 20% to 50% of voting stock.

Cost Method

An accounting method where investments are recorded at their acquisition cost.

Journal Entries

The method by which transactions are recorded in the company's accounting records with a debit and credit entry.

Significant Influence

The ability to be involved in the financial and managerial policy decisions of an investment without having controlling authority over those policies.