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The storage facility was built by covol 3 years

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Unformatted text preview: ch it had planned to sell for its $180,000 market value. Although the crane was not needed with the old machine tool, it would be used to position raw materials on the new machine tool. LG4 8–7 Book value Find the book value for each of the assets shown in the following table, assuming that MACRS depreciation is being used. (Note: See Table 3.2 on page 100 for the applicable depreciation percentages.) Asset Installed cost Recovery period (years) Elapsed time since purchase (years) A $ 950,000 5 3 B 40,000 3 1 C 96,000 5 4 D 350,000 5 1 E 1,500,000 7 5 LG4 8–8 Book value and taxes on sale of assets Troy Industries purchased a new machine 3 years ago for $80,000. It is being depreciated under MACRS with a 5-year recovery period using the percentages given in Table 3.2 on page 100. Assume 40% ordinary 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: $100,000; $56,000; $23,200; and $15,000. LG4 8–9 Tax calculat...
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