Question 4. [Marks: 12.5] a) A corporation sold a piece of equipment during the current tax year for $87,000. The [4.5] accounting records show that its cost basis, B, is $100,000 and the accumulated depreciation is $130,100. Assume that the effective income tax rate as a decimal is 0.35 (35%). Based on this information, compute i. the gain (loss) on disposal, ii. the tax liability (or credit) resulting from this sale, iii. the tax liability (or credit) if the accumulated depreciation was $72,600 instead of $130,100? [8] b) A machine has been purchased and placed in service for operation by a company. Its cost basis is $60,000, and it has an estimated MV of $12,000 at the end of an estimated useful life of 14 years. Compute the depreciation amount and the BV up to year seventh of its life by each of these methods - i. The SL method ii. The 200% DB method with switchover to SL iii. The SYD method By investigating the different methods of depreciation and BV up to seventh year of the machine, separate the depreciation method that is to be chosen for the machine by the company