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I agree with the comments about CCA being correctly calculated due to a short fiscal year. So there are no Profile issues here that I can see.

There are two other issues which I would like to point out. There is a clear distinction between accounting practice and tax matters. Yang's working papers would properly list each individual asset and calculate depreciation on an individual basis. The purpose of CCA schedules, however, is for a pooling of assets within a class (with the exception of Class 1 assets which need to be kept separate according to the Income Tax Act). I see there are three items of equipment, all separately listed as Class 8 on three separate lines. These should have been accumulated in reported as total purchases of $1,168 on one line only. Why? The amounts here are rather immaterial, but let's just speculate that Widget A, costing $441, wasn't useful to company any more in year 2. It was sold for $440. You now have an "unforced" tax error. Widget A was sold for just $1 less than the original cost, but since it was reported as a separate item on one line with CCA claimed of $12, Profile will show a recapture of depreciation of $11. From an accounting perspective yes, there is a gain on disposal of an asset. But for tax purposes, all that should be done is decrease the Class 8 pool by $440 with no recapture.

The same procedure should have been followed for those three computers individually listed as Class 50 assets. They need to be pooled. So both Classes 8 and 50 face potential incorrect tax treatment down the road the way Schedule 8 is set up.

My other issue is purely for convenience and has no effect on taxes. In the initial year, I prefer to enter assets to Schedule 8 in order of class number. By doing that, you have a numerical ranking of classes with Class 8, followed by 10, 14.1 and 50. This is purely cosmetic and naturally gets messed up anyway when this company, for example, bought a building in year two and has to add Class 1 to the schedule. This, being a later addition, will automatically fall at the bottom of the list.

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