The CEO also needs help understanding the tax consequences of the disposal of a old freighting truck. What would a CCA schedule for tax depreciation of a freighting truck look like if it were purchased three years ago on January 1, 2015 for $350,000 (assume Class 16 with CCA rate of 40% and half-year rule applying). Calculate the tax consequence if the truck were to be sold at the beginning of this year (i.e., end of 2017) for either $90,000 or $120,000. The truck is the only asset in the class. Utilize the average tax rate that America Coffee House had in the last five years in your analysis of the tax impact.

Intangible Assets $50.00 $60.00 $60.00 $70.00 $70.00 Total Long-Term Assets $167.00 $190.00 $191.00 $199.00 $186.00 Total Assets $232.00 $258.13 $283.66 $309.31 $304.97 Liabilities Account Payable $44.00 $50.80 $60.00 $70.00 $75.00 Accrued Liabilities $12.40 $15.00 $20.00 $25.00 $30.00 Current Liabilities $56.40 $65.80 $80.00 $95.00 $105.00 Long-term Debt $70.00 $100.00 $120.00 $140.00 $160.00 Total Liabilities $126.40 $165.80 $200.00 $235.00 $265.00 Shareholder's Equity Common Shares $50.00 $50.00 $50.00 $50.00 $50.00 Preferred Shares $10.00 $10.00 $10.00 $10.00 $10.00 Retained Earnings $45.60 $32.33 $23.66 $14.31 $(20.03] Total Equity $105.60 $92.33 $83.66 $74.31 $39.97 Total Liabilities & Equity $232.00 $258.13 $283.66 $309.31 $304.97America Coffee House Statement of Earnings (Income Statement) For the Year Ended Dec 31, 2017 In millions of dollars 2013 2014 2015 2016 2017 Revenue N. America Retail $50.00 $80.00 $120.00 $140.00 $110.00 Wholesale $20.00 $18.00 $18.00 $17.00 $18.00 International $10.00 $12.00 $14.00 $17.00 $21.00 Total Revenue $80.00 $110.00 $152.00 $174.00 $149.00 Cost of Goods Sold (COGS) $35.20 $51.70 $72.96 $85.26 $75.99 Gross Profit $44.80 $58.30 $79.04 $88.74 $73.01 Operating Expenses Advertising & Marketing $5.00 $5.00 $8.00 $8.00 $10.00 General & Administrative $9.00 $13.00 $15.00 $17.00 $20.00 Research, IT, & Development $3.00 $3.00 $3.00 $3.00 $3.00 Depreciation & Amortization $3.00 $7.00 $15.00 $22.00 $33.00 Total Operating Expenses $20.00 $28.00 $41.00 $50.00 $66.00 Operating Income $24.80 $30.30 $38.04 $38.74 $7.01 Interest Expense $5.60 $8.00 $9.60 $11.20 $12.80 Pre-tax Income $19.20 $22.30 $28.44 $27.54 $ (5.79) Income Taxes $4.80 $5.58 $7.11 $6.89 $(1.45) Net Income (Loss) $14.40 $16.73 $21.33 $20.66 $(4.34) America Coffee House Statement of Financial Position (Balance Sheet) At Dec 31, 2017 In millions of dollars Assets 2013 2014 2015 2016 2017 Cash $30.00 $22.13 $25.16 $22.81 $6.47 Accounts Receivable $20.00 $26.00 $32.50 $37.50 $47.50 Inventory $15.00 $20.00 $35.00 $50.00 $65.00 Total Current Assets $65.00 $68.13 $92.66 $110.31 $118.97 Gross Property Plant & Equipment $164.00 $184.00 $200.00 $220.00 $240.00 Less: Accumulated Depreciation $(47.00) $(54.00) $(69.00) $(91.00) $(124.00) Net Property, Plant, & Equipment $117.00 $130.00 $131.00 $129.00 $116.00