Genetic Insights Co. purchases an asset for $12.732. This asset qualifies as a s

Question

Genetic Insights Co. purchases an asset for $12.732. This asset qualifies as a sevenyear recovery asset under MACRS. The seven-year fixed depreciation percentages for years 1,2,3,4. 5, and 6 are 14.29%, 24.49%, 17.49%, 12.49%, 8.93%, and 8.93%, respectively. Genetic Insights has a tax rate of 30%. The asset is sold at the end of six years for $4,618. Calculate gain or loss on disposal Gain shoutd be entered as a positive number. Loss should be entered as a negative number. Round the GnSWEr to two decimals Your AnEWer Save Page 3 of 10 iext Page save Alt Responses Go to Supmit Quiz

Explanation / Answer

Book value as on date of disposal=12732(1-0.1429-0.2449-0.1749-0.1249-0.0893-0.0893)

=$1703.5416

Hence gain on disposal=(4618-1703.5416)

=$2914.46(Approx).

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