Problem
EB Co. (a public corporation) began operations in 2021 in Edmonton, Alberta. All income in the company classifies as 'business income'. The following information was provided:
I. EB Co. signed an 8-year lease for a building when the business began. The building is estimated to be worth $500,000. EB Co. has an option to renew the lease for an additional 2 years. EB Co. spent $100,000 in 2021 on improvements to the leased building at the beginning of the year.
II. EB Co. purchased land and a building adjacent to the business for $120,000 in 2021. The Class 1 (4%) building was valued at $50,000 and is used as a storage facility.
III. EB Co. purchased several small tools in 2021 that are used to maintain the rental tools. The total cost of these tools was $8,000, and each tool cost under $500.
IV. A delivery van costing a total of $50,000 was purchased in 2021, to be used solely in the business.
V. EB Co. furnished the business at a cost of $30,000 with Class 8 assets.
VI. A computer was purchased for $1,000 to track sales and inventory.
VII. Incorporation costs for the business in 2021 were $5,000.
VIII. EB Co. purchased a $42,000 passenger vehicle to be used for the business. In 2021 the vehicle was driven 20,000 km. 15,000 km were for business. (The car was to be used exclusively for business in the following years.)
IX. The business was very successful in the first year so EB Co. chose to use all of the CCA that was available in 2021.
X. EB Co.'s business is an HST registrant.
The following transactions occurred in 2022:
• EB Co. sold the delivery truck for $48,000, and immediately purchased a newer and larger model for $55,000.
• New shelving was purchased for the reception area, at a cost of $1,000.
• Maximum CCA was claimed for the year.
Calculate the capital cost allowance per class claimed by the company in 2021 and 2022. All the assets qualify as Accelerated Investment Incentive Property.