This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: An asset was purchased three years ago for 100,000 and can be sold for 40,000 today. The asset has ... (Read 77 times)

bobypop

  • Hero Member
  • *****
  • Posts: 539
on: Jul 11, 2018
An asset was purchased three years ago for 100,000 and can be sold for 40,000 today. The asset has been depreciated using the MACRS 5-year recovery period and the firm pays 40 percent taxes on both ordinary income and capital gain.
 
  (a) Compute recaptured depreciation and capital gain (loss), if any.
  (b) Find the firm's tax liability.

Question 2

The value of a bond is the present value of the ________.
 
  A) dividends and maturity value
  B) interest and dividend payments
  C) maturity value
  D) interest payments and maturity value


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

coreycathey

  • Sr. Member
  • ****
  • Posts: 333
Reply #1 on: Jul 11, 2018
Answer to Question 1

(a) Book Value = 100,000 (1 - 0.20 - 0.32 - 0.19 ) = 29,000
Recaptured depreciation = 40,000 - 29,000 = 11,000
Capital gain = 0
11,000
(b) Tax liability = 11,000  0.40 = 4,400

Answer to Question 2

D


bobypop

  • Member
  • Posts: 539
Reply 2 on: Jul 11, 2018
Excellent

kjohnson

  • Member
  • Posts: 330
Reply 3 on: Yesterday
Gracias!

« previous next »
 

Did you know?

There are actually 60 minerals, 16 vitamins, 12 essential amino acids, and three essential fatty acids that your body needs every day.

Did you know?

Only 12 hours after an egg cell is fertilized by a sperm cell, the egg cell starts to divide. As it continues to divide, it moves along the fallopian tube toward the uterus at about 1 inch per day.

Did you know?

Pubic lice (crabs) are usually spread through sexual contact. You cannot catch them by using a public toilet.

Did you know?

Looking at the sun may not only cause headache and distort your vision temporarily, but it can also cause permanent eye damage. Any exposure to sunlight adds to the cumulative effects of ultraviolet (UV) radiation on your eyes. UV exposure has been linked to eye disorders such as macular degeneration, solar retinitis, and corneal dystrophies.

Did you know?

The types of cancer that alpha interferons are used to treat include hairy cell leukemia, melanoma, follicular non-Hodgkin's lymphoma, and AIDS-related Kaposi's sarcoma.

Discipline-specific training can take years to perfect. Discipline-specific training can take years to perfect.
A sidewheeler on the Mississippi. In 1856 Samuel Clemens became an apprentice to a steamboat pilot a A sidewheeler on the Mississippi. In 1856 Samuel Clemens became an apprentice to a steamboat pilot a
Adults in the middle-aged group (37–42 years) score higher on measures of generativity than either ... Adults in the middle-aged group (37–42 years) score higher on measures of generativity than either ...
Top Prescriptions for Children Under 17 Years of Age (2002–2010) Top Prescriptions for Children Under 17 Years of Age (2002–2010)
In Canada, 2/3 women and over 1/2 of men 55 to 64 years of age are grandparents In Canada, 2/3 women and over 1/2 of men 55 to 64 years of age are grandparents
Percentage of youth age 15 to 19 years with at-risk levels of body composition & fitness Percentage of youth age 15 to 19 years with at-risk levels of body composition & fitness
Video: Osmosis - water transport

For a complete list of videos, visit our video library