B) For the same problem above, what is the taxable income in year 5 if the equipment is sold for $35,000?

C) For the same problem above, what are the taxes owed for this equipment sale in year 5 if the company is in the 21% corporate tax bracket?

A piece of equipment is bought for $70,000 and is depreciable, with a salvage value of $2,000. This equipment uses a 7 year MACRS schedule. The equipment is sold in year 5 for $35,000. Note that with MACRS: depreciation in the year sold and salvage value are treated differently than other methods. A) What is the Book Value of the equipment in year 5? ( note that the equipment is sold in year 5, but the appropriate depreciation in Year 5 would still be applied to the book value