0. Acme Pty Ltd acquired a machine from its parent company for $500,000 on 1 January this year. The market value of the machine at that time was $300,000. The parent company has owned the machine for three years and calculated its depreciation deductions using the prime cost method and an effective life of eight years. Calculate the decline in value of the machine for Acme this income year. Assume that it is not a leap year and Acme is not a small business entity.

   Acme sold the machine to an unrelated party for $400,000 on 1 December this year. Advise Acme of its tax consequences on disposal of the machine.