Book value and taxes on sale of assets Troy Industries purchased a new machine 3 year(s) ago for $80,000. It is being depreciated under MACRS with a 5-year recovery period using the schedule. Assume 40% ordinary and capital gains tax rates 5 1. . a. What is the book value of the machine? b. Calculate the firm's tax liability if it sold the machine for each of the following amounts: $100,000; $58,000; $23,200; and $15,000. a. The remaining book value is $ (Round to the nearest dollar) ! Data table b. Calculate the firm's tax liability for each case: (Round to the nearest dollar.) Sale Tax on Tax on Total Capital Gain Depreciation Recovery (Click on the loon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Price Capital Gain Recovery Tax $ 100.000 S S S $ (Round to the nearest dollar.) Sale Capital Tax on Tax on Total Depreciation Recovery Price Gain Capital Gain Recovery Tax $ 56,000 S S S $ (Round to the nearest dollar.) Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Percentage by recovery year* Recovery year 3 years 5 years 7 years 10 years 1 33% 20% 14% 10% 2 45% 32% 25% 18% 3 15% 19% 18% 14% 4 72 12% 12% 12% 5 12% 9% 9% 5% 9% 9% 7 7 9 9% 7% 8 4% 6% 9 10 8% % 11 4% Totals 100% 100% 100% 100% 'These percentages have been rounded to the nearest whole percent to simplify calculations while retaining realisrn. To calculate the actual cepreciation for tax purposes, be sure to apply the actual urrounded percentages or directly apply double-declining balance (200%) depreciation using the half-year convention. Sale Capital Tax on Total Tax on Capital Gain Depreciation Recovery Price Gain Recovery Tax $ 23,200 S $ S $ (Round to the nearest dollar.) Sale Capital Gain Tax on Capital Gain Depreciation Recovery Tax on Recovery Total Tax Price 15,000 S $ $ S S $ Print Done