Three years ago, Girston Gravel Pit purchased a material conveyor system. The company has decided to sell

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Three years ago, Girston Gravel Pit purchased a material conveyor system. The company has decided to sell the system and acquire more advanced technology. Data relating to the existing system follow.

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a. How much depreciation has been taken on the conveyor system for (1) tax and (2) financial accounting purposes?

b. What will be the after-tax cash flow from the sale of this asset?

c. What will be the after-tax cash flow from the sale of the asset if its fair value is $\$ 9,000$ rather than $\$ 37,000$ ?

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Cost Accounting Foundations And Evolutions

ISBN: 9781618533531

10th Edition

Authors: Amie Dragoo, Michael Kinney, Cecily Raiborn

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Question Posted: May 18, 2024 11:07 PM

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Three years ago, Girston Gravel Pit purchased a material conveyor system. The company has decided to sell

Question:

Current fair value $37,000 Original cost.... 99,000 Current book value for tax purposes 18,000 Current book value for financial accounting purposes. 35,000 Corporate tax rate..... 30%

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Cost Accounting Foundations And Evolutions

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