John invests $10,000 in a non-registered mutual fund on January 1st. On December 31st of the same year, the units are worth $10,500. He receives a distribution of $200 (composed of $100 eligible dividends and $100 capital gains) and reinvests it by purchasing additional units. What is John's Adjusted Cost Base (ACB) at the beginning of the next year?

Question: John invests $10,000 in a non-registered mutual fund on January 1st. On December 31st of the same year, the units are worth $10,500. He receives a distribution of $200 (composed of $100 eligible dividends and $100 capital gains) and reinvests it by purchasing additional units. What is John's Adjusted Cost Base (ACB) at the beginning of the next year?

Answer options: ✅ $10,200

• $10,000
• $10,500
• $10,700

Correct answer: $10,200

Explanation: For non-registered accounts, the reinvested distributions increase the Adjusted Cost Base (ACB). Initial investment of $10,000 + Reinvested distribution of $200 = $10,200. The unrealized gain does not affect the ACB until the units are sold. This is a common calculation for non-registered accounts.