Moldes-Engineerng Econx oapter 5-17(1)pdf @Solved Solve the folowing e connect X

Question

Moldes-Engineerng Econx oapter 5-17(1)pdf @Solved Solve the folowing e connect X )new doc 2017-11-19 hus. × + onnect.htm 32% a search Chapter 17 Homework Saved Help Save& Exit Submit An in-place machine with B= $140,000 was depreciated by using Modified Accelerated Cost Recovery System (MACRS) over a 3-year perlod. The machine was sold for $60,000 at the end of year 2 when the company decided to import the item that required the use of the machine. In year 2. gross income (G)- St milion and operating expenses (0E)- $500,000. Determine the tax liability in year 2 if -35%. 653) The tax liability in year 2 is determined to be $ Reference links 17.4 Depreciation Recapture and Copital Gains (Losses)

Explanation / Answer

Depreciation for year 1 :140000*33.33%= 46662

year2 :140000*44.45%=62230

Book valueof asset =140000-46662-62230 = 31108

Gain on sale =sale value -book value

      =60000 - 31108

      = 28892

Tax liability for year 2 : 163331.70

Gross Income 1,000,000 less:operating expense -500,000 Depreciation -62230 Operating income 437770 other income Gain on sale of machine 28892 Income before tax 466662 Tax on income [466662*.35] 163,331.70

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