An in-place machine with B = $110,000 was depreciated by using Modified Accelerated Cost Recovery System (MACRS) over a 3-year period. 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 (GI) = $1 million and operating expenses (OE) = $500,000
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6..An in-place machine with B = $110,000 was depreciated by using Modified Accelerated Cost Recovery System (MACRS) over a 3-year period. 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 (GI) = $1 million and operating expenses (OE) = $500,000. Determine the tax liability in year 2 if Te = 35%.
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- An in-place machine with B= $165,000 was depreciated by using Modified Accelerated Cost Recovery System (MACRS) over a 3-year period. 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 (Gl) = $1 million and operating expenses (OE) = $500,000. Determine the tax liability in year 2 if Te = 35%. The tax liability in year 2 is determined to be $An in-place machine with B = $155,000 was depreciated by using the Modified Accelerated Cost Recovery System (MACRS) over a 3-year period. 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 (GI) = $1 million and operating expenses (OE) = $500,000. Determine the tax liability in year 2 if Te = 35%. The tax liability in year 2 is determined to be $ show the steps please(without using excel)An in-place machine with B= $115,000 was depreciated by using Modified Accelerated Cost Recovery System (MACRS) over a 3-year period. 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 (GI) = $1 million and operating expenses (OE) = $500,000. Determine the tax liability in year 2 if Te= 35%. The tax liability in year 2 is determined to be $
- This question is based on the following information: Trinity Company bought a copying machine costing P 123,000 with an estimated life of 3 years with negligible salvage value. The estimated earnings after taxes of this machine at the end of each year are estimated below: Earnings after taxes End of year 1 P 8,120 2 7,200 3 6,820 The company is using the straight line method for computing the depreciation. What is the accounting rate of return on the average cost of investment? a. 10.5% b. 11.5% c. 12% d. 15%A tax and duty-free importation of a 30hp sand mill for paint manufacturing costs P360,113. Bank charges arrester and brokerage cost P5,064. Foundation and installation cost were P25,802. Other incidental expenses amount to P23,060. Salvage value of the mill is estimated to be P61,021 after 30 years. Determine the following: a. Rate of depreciation. b. Depreciation after 11 years. c. Book value after 19 years.The Dauten Toy Corporation currently uses an injection molding machine that was purchased prior to the new tax legislation. The machine is being depreciated on a straight- line basis, and it has 6 years of remaining life. Its current book value is $2,400, and it can be sold for $2,600 at this time. Thus, the anual depreciation expense is $2,400/6= $400 per year. If the old machine is not replaced, it can be sold for $500 at the end of its useful life. Dauten offered a replacement machine which has a cost of $10,000, an estimated useful life of 6 years, and an estimated salvage value of $800. The replacement machine is eligible for 100% bonus depreciation at the time of purchase. The replacement machine would permit an output expansion, so sales would arise by $1,000 per year; even so, the new machine's much greater efficiency would cause operating expenses simultaneously increase by $500. Dauten's marginal federal-plus- state tax rate is 25%, and its WACC is 11% What is the NPV of the…
- The Dauten Toy Corporation uses an injection molding machine that was purchased prior to the new tax legislation. This machine is being depreciated on a straight-line basis, and it has 6 years of remaining life. Its current book value is $2,100, and it can be sold for $2,500 at this time. Thus, the annual depreciation expense is $2,100/6 = $350 per year. If the old machine is not replaced, it can be sold for $500 at the end of its useful life. Dauten is offered a replacement machine which has a cost of $10,000, an estimated useful life of 6 years, and an estimated salvage value of $800. The replacement machine is eligible for 100% bonus depreciation at the time of purchase. The replacement machine would permit an output expansion, so sales would rise by $800 per year; even so, the new machine's much greater efficiency would cause operating expenses to decline by $1,500 per year. The new machine would require that inventories be increased by $2,000, but accounts payable would…A special-purpose machine is to be depreciated as a linear function of use (units-of-production method). It costs $35,000 and is expected to produce 150,000 units and then be sold for $5,000. Up to the end of the third year, it had produced 60,000 units, and during the fourth year it produced 18,000 units. What is the depreciation deduction for the fourth year and the BV at the end of the fourth year?For specialized devices for use with its latest GPS / GIS system, Freeman Engineering charged $28,500. Using MACRS depreciation, the equipment was depreciated over a 3 year recovery period. After 2 years, the company sold the equipment for $5000 when it bought an improved system. (a) Assess the value of the recapture of depreciation or the capital loss involved in the asset sale. (b) What tax impact is that number going to have?
- Equipment associated with manufacturing small railcars had a first cost of $250,000 with an expected salvage value of $30,000 at the end of its 5-year life. The revenue was $640,000 in year 2, with operating expenses of $98,000. If the company’s effective tax rate was 34%, what would be the difference in taxes paid in year 2 if the depreciation method were straight line instead of Modified Accelerated Cost Recovery System (MACRS)? The MACRS depreciation rate for year 2 is 32%.A machine was purchased 4 years ago for $50,000. The depreciation amount each year was $10,000. The firm that owns the machine no longer has a need for it, but a buyer is now willing to pay $60,000 for it because machines of this type are no longer available. If the tax rate is 23%, what tax will be owed on the transaction? EditThe Dauten Toy Corporation currently uses an injection molding machine that was purchased prior to the new tax legislation. This machine is being depreciated on a straight-line basis, and it has 6 years of remaining life. Its current book value is $2,400, and it can be sold for $2,500 at this time. Thus, the annual depreciation expense is $2,400/6 = $400 per year. If the old machine is not replaced, it can be sold for $500 at the end of its useful life. Dauten is offered a replacement machine which has a cost of $10,000, an estimated useful life of 6 years, and an estimated salvage value of $800. The replacement machine is eligible for 100% bonus depreciation at the time of purchase. The replacement machine would permit an output expansion, so sales would rise by $800 per year; even so, the new machine's much greater efficiency would cause operating expenses to decline by $1,500 per year. The new machine would require that inventories be increased by $2,000, but accounts payable would…