Question

Question Help P11-8 (similar to) Book value and taxes on sale of assets Troy Industries purchased a new machine 4 year s ago for $84,000. It is being depreciated under MACRS with a 5-year recovery period using the schedule and capital gains tax rates. a. What is the book value of the machine? b. Calculate the firm's tax liability if it sold the machine for each of the following amounts: $100,800; $58,800; $14,280; and $10,000. Assume 40% ordinary (Round to the nearest dollar) The remaining book value is $ Data Table a. Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Percentage by recovery year 10 years 10% 18% 14% 12% 9% 8% 7 years 14% 25% 18% 12% 996 9% 9% 4% 5 years 3 years Recovery year 32% 19% 12% 12% 5% 15% 6% 6% 6% 4% 100% 10 100% 100% 100% Totals These percentages have been rounded to the nearest whole percent to simplify calculations while Enter your answer in the answer box and then click Check Answer. Print Done

Answer 1

1.
=84000*(12%+5%)=14280

2.
=MAX(100800-84000*(12%+5%),0)*40%=34608

3.
=MAX(58800-84000*(12%+5%),0)*40%=17808

4.
=MAX(14280-84000*(12%+5%),0)*40%=7.27595761418343E-13

5.
=MAX(10000-84000*(12%+5%),0)*40%=0