Final answer:
The UCC for a class 8 asset at the end of the year involves starting with the opening UCC, subtracting proceeds from sales, and then considering any additional purchases or disposals. In this case, the closing UCC for Green Gardens Inc.'s machinery is $3,500 after selling the machine for $2,000, with no other transactions occurring.
Step-by-step explanation:
The calculation of the undepreciated capital cost (UCC) for a class 8 asset at the end of the tax year involves starting with the UCC at the beginning of the year, adding any purchases, then subtracting the proceeds from any dispositions in that class, and finally subtracting the capital cost allowance (CCA) claimed for the year. In this case, Green Gardens Inc. sold a class 8 piece of machinery for $2,000 in 20x0 that initially cost $5,000, and there were no other transactions in the class 8 pool. The opening UCC was $5,500.
To calculate the closing UCC for class 8 at the end of 20x0, you would:
- Start with the UCC at the beginning of 2019, which is $5,500.
- Subtract the proceeds from the sale of the machine, which is $2,000.
- Subtract the remaining balance from the class, if the proceeds are less than the UCC at the beginning of the year.
Therefore, the resulting UCC at the end of 2019 will be $5,500 minus $2,000, which equals $3,500.
The correct answer to the question is option C. $3,500.