Exercise 16-34 Gain or Loss on Disposal; Taxes (Section 2) (LO 16-4)

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In December of 20x4, Memphis Plastics sold a forklift for $9,255. The machine was purchased in 20x1 for $50,000. Since then $38,845 in depreciation has been recorded on the forklift.

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Section BreakExercise 16-34 Gain or Loss on Disposal; Taxes (Section 2) (LO 16-4)

2.

value: 1.00 points

Required information

Exercise 16-34 Part 1

1.	What was the forklifts book value at the time of sale?

References

eBook & Resources

ExerciseDifficulty: Easy

Exercise 16-34 Part 1Learning Objective: 16-04 Determine the after-tax cash flows in an investment analysis.

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3.

value: 1.00 points

Required information

Exercise 16-34 Part 2

2.	Compute the gain or loss on the sale.

References

eBook & Resources

ExerciseDifficulty: Easy

Exercise 16-34 Part 2Learning Objective: 16-04 Determine the after-tax cash flows in an investment analysis.

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4.

value: 1.00 points

Required information

Exercise 16-34 Part 3

3.	Determine the after-tax cash flow at the time the forklift was sold. The firms tax rate is 45 percent.