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Norka Inc. has purchased an advanced measurement machine for research and development at a cost of $120,000. Sales tax on the machine was charged at

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Norka Inc. has purchased an advanced measurement machine for research and development at a cost of $120,000. Sales tax on the machine was charged at 4%. The freight charges for the machine were $15,000. The cost of installation was $17,000. Norka depreciates the equipment using the 5-year MACRS schedule. What is the cost basis of the asset? What will be the depreciation expense for year 3? Calculate the pre-tax gain or loss on the asset disposal if the asset will be sold for $55,000 at the end of year 4

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