3. You purchased a machinery for $140,000 which is a 7-year asset class. You sold it...

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3. You purchased a machinery for $140,000 which is a 7-year asset class. You sold it in the middle of the year 3 for $20,000.

business economics

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Answer 1

Answer #1

Answer -

Yearly depreciation = 140000/7

= 20000

Total dep for 3.5 years = 20000*3.5

= 70000

Book value = 140000-70000

= $ 70000

Sales value = $20000

Since the sale value is less than the book value

There is capital loss

= 70000-20000

= Loss = $ 50000

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Answer 2

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