You own some equipment that you purchased 4 years ago at a cost of $225,000.The equipment is 5-year property for MACRS.You are considering selling the equipment today for $87,000.Which one of the following statements is correct if your tax rate is 35 percent?
A)The tax due on the sale is $26,425.
B)The book value today is $186,120.
C)The accumulated depreciation to date is $38,880.
D)The taxable amount on the sale is $38,880.
E)The aftertax salvage value is $70,158.

Question

You own some equipment that you purchased 4 years ago at a cost of $225,000.The equipment is 5-year property for MACRS.You are considering selling the equipment today for $87,000.Which one of the following statements is correct if your tax rate is 35 percent? 
A)The tax due on the sale is $26,425. 
B)The book value today is $186,120. 
C)The accumulated depreciation to date is $38,880. 
D)The taxable amount on the sale is $38,880. 
E)The aftertax salvage value is $70,158.

Quizplus · Accepted Answer

The Answer of You own some equipment that you purchased 4 years ago at a cost of $225,000.The equipment is 5-year property for MACRS.You are considering selling the equipment today for $87,000.Which one of the following statements is correct if your tax rate is 35 percent? 
A)The tax due on the sale is $26,425. 
B)The book value today is $186,120. 
C)The accumulated depreciation to date is $38,880. 
D)The taxable amount on the sale is $38,880. 
E)The aftertax salvage value is $70,158.

You Own Some Equipment That You Purchased 4 Years Ago