A corporation sold a piece of equipment during the current tax year for $78,600. The accounting records show that its cost basis, B, is $190,000 and the accumulated depreciation is $139,200. Assume that the effective income tax rate as a decimal is 0.40 (40%). Based on this information, Solve, what is (a) the gain (loss) on disposal, (b) the tax liability (or credit) resulting from this sale, (c) the tax liability (or credit) if the accumulated depreciation was $92,400 instead of $139,200 ?
A corporation sold a piece of equipment during the current tax year for $78,600. The accounting records show that its cost basis, B, is $190,000 and the accumulated depreciation is $139,200. Assume that the effective income tax rate as a decimal is 0.40 (40%). Based on this information, Solve, what is (a) the gain (loss) on disposal, (b) the tax liability (or credit) resulting from this sale, (c) the tax liability (or credit) if the accumulated depreciation was $92,400 instead of $139,200 ?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter18: Accounting For Income Taxes
Section: Chapter Questions
Problem 5RE: Turnip Company purchased an asset at a cost of 10,000 with a 10-year life during the current year....
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A corporation sold a piece of equipment during the current tax year for $78,600. The accounting records show that its cost basis, B, is $190,000 and the
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