P118) Book value and taxes on the sale of assets Research Clinic purchased a blood-testing machine 4 years ago for $96,000. It is being depreciated under MACRS with a 7-year recovery period using the percentages given in Table 4.2 on page 166. Assume a 30% tax rate.

a. What is the book value of the blood-testing machine?

b. Calculate the clinics tax liability if it sold the blood-testing machine for each of the following amounts: $120,000; $26,000; $231,200; and $21,000.