Question

the machine will operate 1,800 hr per year? The companys cost-of-capital rate is 7.3%. 2.9 A tractor with an adjusted basis (from depreciation) of $65,000 is sold for $60,000 and a new tractor is purchased with a cash payment of $330,000. These are two separate transactions. What is the tax depreciation basis of the new tractor?
Please show steps/calculations
0 0
Add a comment Improve this question Transcribed image text
Answer #1

In 1st transaction, there is a Loss on Sale of $5000

which will be though Profit & Loss account

In 2nd transaction,

Cost of New Tractor = 330,000 is the Tax dep basis.

Because SLN dep = (Cost of tractor-Salvage)/Life

So tax depreciation basis of the new tractor = $330,000

Add a comment
Know the answer?
Add Answer to:
Please show steps/calculations the machine will operate 1,800 hr per year? The company's cost-of-capital rate is...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • the machine will operate 1,800 hr per year? The company's cost-of-capital rate is 7.3%. 2.9 A...

    the machine will operate 1,800 hr per year? The company's cost-of-capital rate is 7.3%. 2.9 A tractor with an adjusted basis (from depreciation) of $65,000 is sold for $60,000 and a new tractor is purchased with a cash payment of $330,000. These are two separate transactions. What is the tax depreciation basis of the new tractor?

  • One year​ ago, your company purchased a machine used in manufacturing for $95,000.vYou have learned that a new machine i...

    One year​ ago, your company purchased a machine used in manufacturing for $95,000.vYou have learned that a new machine is available that offers many advantages and you can purchase it for $150,000 today. It will be depreciated on a​ straight-line basis over 10 years and has no salvage value. You expect that the new machine will produce a gross margin​ (revenues minus operating expenses other than​ depreciation) of $50,000 per year for the next 10 years. The current machine is...

  • One year​ ago, your company purchased a machine used in manufacturing for $110,000. You have learned...

    One year​ ago, your company purchased a machine used in manufacturing for $110,000. You have learned that a new machine is available that offers many advantages and you can purchase it for $140,000 today. It will be depreciated on a​ straight-line basis over 10 years and has no salvage value. You expect that the new machine will produce a gross margin​ (revenues minus operating expenses other than​ depreciation) of $60,000 per year for the next 10 years. The current machine...

  • The Everly Equipment Company's flange-lipping machine was purchased 5 years ago for $70,000. It had an...

    The Everly Equipment Company's flange-lipping machine was purchased 5 years ago for $70,000. It had an expected life of 10 years when it was bought and its remaining depreciation is $7,000 per year for each year of its remaining life. As older flange-lippers are robust and useful machines, this one can be sold for $20,000 at the end of its useful life. A new high-efficiency digital-controlled flange-lipper can be purchased for $140,000, including installation costs. During its 5-year life, it...

  • The Everly Equipment Company's flange-lipping machine was purchased 5 years ago for $50,000. It had an...

    The Everly Equipment Company's flange-lipping machine was purchased 5 years ago for $50,000. It had an expected life of 10 years when it was bought and its remaining depreciation is $5,000 per year for each year of its remaining life. As older flange-lippers are robust and useful machines, this one can be sold for $20,000 at the end of its useful life. A new high-efficiency digital-controlled flange-lipper can be purchased for $120,000, including installation costs. During its 5-year life, it...

  • Problem 11-13 Replacement Analysis The Everly Equipment Company's flange-lipping machine was purchased 5 years ago for...

    Problem 11-13 Replacement Analysis The Everly Equipment Company's flange-lipping machine was purchased 5 years ago for $100,000. It had an expected life of 10 years when it was bought and its remaining depreciation is $10,000 per year for each year of its remaining life. As older flange-lippers are robust and useful machines, this one can be sold for $20,000 at the end of its useful life. A new high-efficiency digital-controlled flange-lipper can be purchased for $150,000, including installation costs. During...

  • The Everly Equipment Company's flange-lipping machine was purchased 5 years ago for $90,000. It had an...

    The Everly Equipment Company's flange-lipping machine was purchased 5 years ago for $90,000. It had an expected life of 10 years when it was bought and its remaining depreciation is $9,000 per year for each year of its remaining life. As older flange-lippers are robust and useful machines, this one can be sold for $20,000 at the end of its useful life. A new high-efficiency digital-controlled flange-lipper can be purchased for $130,000, including installation costs. During its 5-year life, it...

  • Marshall-Miller & Company is considering the purchase of a new machine for $50,000, installed. The machine...

    Marshall-Miller & Company is considering the purchase of a new machine for $50,000, installed. The machine has a tax life of 5 years. Under the new tax law, the machine is eligible for 100% bonus depreciation, so it will be fully depreciated at t= 0. The firm expects to operate the machine for 4 years and then to sell it for $21,500. If the marginal tax rate is 25%, what will the after-tax salvage value be when the machine is...

  • Replacement Analysis The Everly Equipment Company's flange-lipping machine was purchased 5 years ago for $80,000. It...

    Replacement Analysis The Everly Equipment Company's flange-lipping machine was purchased 5 years ago for $80,000. It had an expected life of 10 years when it was bought and its remaining depreciation is $8,000 per year for each year of its remaining life. As older flange-lippers are robust and useful machines, this one can be sold for $20,000 at the end of its useful life. A new high-efficiency digital-controlled flange-lipper can be purchased for $150,000, including installation costs. During its 5-year...

  • One year​ ago, your company purchased a machine used in manufacturing for $115,000. You have learned...

    One year​ ago, your company purchased a machine used in manufacturing for $115,000. You have learned that a new machine is available that offers many​ advantages; you can purchase it for $140,000 today. It will be depreciated on a​ straight-line basis over ten​ years, after which it has no salvage value. You expect that the new machine will contribute EBITDA​ (earnings before​ interest, taxes,​ depreciation, and​ amortization) of $60,000 per year for the next ten years. The current machine is...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT