MACRS Schedule Table:

Book value and taxes on sale of assets Troy Industries purchased a new machine 3 year(s) ago for $76,000. It is being Assume 40% ordinary and capital gains tax depreciated under MACRS with a 5-year recovery period using the schedule rates. 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: $91,200; $53,200; $22,040; and $15,400. a. The remaining book value is $ 22040. (Round to the nearest dollar.) b. Calculate the firm's tax liability for each case: (Round to the nearest dollar.) Capital Depreciation Sale Tax on Tax on Total Capital Gain Tax Price Gain Recovery Recovery 91,200 $ %24 %24 %24 Data Table (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Percentage by recovery year* 7 years Recovery year 3 years 5 years 10 years 33% 20% 14% 10% 2 45% 32% 25% 18% 3 15% 19% 18% 14% 12% 4 12% 12% 12% 9% 5% 8% 9% 9% 7% 4% 6% 6% 10 6% 11 4% 100% 100% Totals 100% 100% *These percentages have been rounded to the nearest whole percent to simplify calculations while retaining realism. To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded percentages or directly apply double-declining balance (200%) depreciation using the half-year convention