FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- 2. The Jones Company has just completed the third year of a five-year MACRS recovery period for a piece of equipment it originally purchased for $302,000. a. What is the book value of the equipment? b. If Jones sells the equipment today for $184,000and its tax rate is 21%, what is the after-tax cash flow from selling it? Note: Assume that the equipment is put into use in year 1. a. What is the book value of the equipment? The book value of the equipment after the third year is $____ (Round to the nearest dollar.) b. If Jones sells the equipment today for $184,000 and its tax rate is 21%, What is the after-tax cash flow from selling it? The total after-tax proceeds from the sale will be $____ (Round to the nearest dollar.)arrow_forwardThe Jones Company has just completed the third year of a five-year MACRS recovery period for a piece of equipment it originally purchased for $298,000. a. What is the book value of the equipment? b. If Jones sells the equipment today for $179,000 and its tax rate is 21%, what is the after-tax cash flow from selling it? Note: Assume that the equipment is put into use in year 1. a. What is the book value of the equipment? The book value of the equipment after the third year is $ (Round to the nearest dollar) b. If Jones sells the equipment today for $179,000 and its tax rate is 21%, what is the after-tax cash flow from selling it? The total after-tax proceeds from the sale will be $. (Round to the nearest dollar.)arrow_forwardWhat is the expected after - tax cash flow from selling a piece of equipment if Probst purchases the equipment today for $548, 860.00, the tax rate is 39.9 percent, the equipment will be sold in 3 years for $98, 800.00, and the equipment will be depreciated to $72, 600.00 over 12 years using straight - line depreciation? $106, 885.74 (plus or minus $10) $262, 538.29 (plus or minus $10) - $72, 688.20 (plus or minus $10) $230,867.00 (plus or minus $10) None of the above is within $10 of the correct answerarrow_forward
- What is the expected after-tax cash flow from selling a piece of equipment if TwoPlus purchases the equipment today for $143,000.00, the tax rate is 23.00 percent, the equipment is sold in 2 years for $36,500.00, and MACRS depreciation is used where the depreciation rates in years 1, 2, 3, 4, and 5 are 20%, 32%, 19%, 12%, and 10%, respectively? O $17,102.80 (plus or minus $10) $37,643.10 (plus or minus $10) $50,470.20 (plus or minus $10) $43,892.20 (plus or minus $10) None of the above is within $10 of the correct answerarrow_forwardNeed all three parts.....don't attempt if you will not solve all three partsarrow_forwardUrgent pleasearrow_forward
- Company A purchases P200,000 of equipment in year zero. It decides to use straight line depreciation over the expected 20 year life of the equipment. The interest rate is 14%. If its average tax rate is 40%, what is the present worth of the depreciation tax held?arrow_forward4arrow_forwardAn asset purchased today at a cost of $50,000 is depreciated straight-line down to value 0 over a period of 5 years, for tax purposes. Suppose the asset is sold at a price of $30,000 at the end of 2 years. What is the after-tax cash inflow from salvage (selling the asset), assuming a tax rate of 40%? a) $30,000 b) $26,000 c) $38,000 d) $20,000 e) None of the abovearrow_forward
- Sandhill Corporation just purchased computing equipment for $22,000. The equipment will be depreciated using a five-year MACRS depreciation schedule. If the equipment is sold at the end of its fourth year for $14,000, what are the after-tax proceeds from the sale, assuming the marginal tax rate is 35 percent? (Round answer to 2 decimal places, e.g. 15.25.)arrow_forwardCan you answer this general accounting question?arrow_forwardThank you in advance!!arrow_forward
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