Question

Book value and taxes on sale of assets??

Troy Industries purchased a new machine 5 ?year(s) ago for $82,000. It is being depreciated under MACRS with a? 5-year recovery period using the schedule:

More Info Koundea Depreciation Percentages Dy Recovery rear using MACRS TO First Four Property Classes Percentage by recovery year 7 years 10 years 5 years 20% 32% 19% 12% 12% 5% 10% 18% 14% 12% 9% 5% 7% 6% 6% 6% 4% 100% 3 years 33% 45 15% 7% 14% 25% 18% 12% 9% 9% 9% 4% Recovery year 4 10 100% 100% Totals 100% Print Done

Assume 40% ordinary and capital gains tax rates.

a. What is the book value of the? machine?

the remaining book value is: $

round to the nearest dollar

b. Calculate the? firm's tax liability if it sold the machine for each of the following? amounts:

$98,400

SALE PRICE	CAPITAL GAIN	TAX ON CAPITAL GAIN	DEPRECIATION RECOVERY	TAX ON RECOVERY	TOTAL TAX
$98,400

ROUND TO THE NEAREST DOLLAR

REPEAT FOR:

$57,400

$4,100

$2,900