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Assignment 1, Question 10: Capital gains taxes Perkins Manufacturing is considering the sale of two nondepreciable assets, X and Y. Asset X was purchased for

Assignment 1, Question 10:

Capital gains taxes

Perkins Manufacturing is considering the sale of two nondepreciable assets, X and Y. Asset X was purchased for $1,930 and will be sold today for $2,280.

Asset Y was purchased for $29,100 and will be sold today for $35,900. The firm is subject to a 40% tax rate on capital gains.

a. Calculate the amount of capital gain, if any, realized on each of the assets.

b. Calculate the tax on the sale of each asset.

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