Q3

Part a

Years Beginning UCC CCA (30%) Ending UCC

1 $85,000.00 $25,500.00 $59,500.00
2 $59,500.00 $17,850.00 $41,650.00
3 $41,650.00 $12,495.00 $29,155.00
4 $29,155.00 $8,746.50 $20,408.50
5 $20,408.50 $6,122.55 $14,285.95
6 $14,285.95 $4,285.79 $10,000.16

Therefore, the UCC at the end of year 6 is $10,000.16

Part b
At the end of the 6th year, the UCC is $10,000.16. Therefore, when the van is sold for $4500 at
the end of 6 years, it will be sold at a loss because the selling price is lower than the ending
UCC. The tax implication is $4500-$10,000.16 = -$5,500.16. It will be sold at a loss of
$5,500.16. The name assigned to this tax implication is a capital loss. 

Part c
At the end of the 6th year, the UCC is $10,000.16. Therefore, when the van is sold for $55,000 at
the end of 6 years, it will be sold at a gain because the selling price is higher than the ending
UCC. The tax implication is $55,000-$10,000.16 = $44,999.84 rounded to $45,000. It will be
sold at a gain of $approximately $45,000. The name assigned to this tax implication is a capital
loss.