Ask Question
4 April, 12:26

Phantom Corporation purchased equipment for $50,000, four years ago. The accumulated depreciation to date is $41,360. If they were able to sell the equipment today for $20,000, what would be the amount of tax due

+5
Answers (1)
  1. 4 April, 15:12
    0
    The correct answer is $11,360 * X.

    For Tax rate = X

    Explanation:

    According to the scenario, the given data are as follows:

    Equipment purchased = $50,000

    Accumulated depreciation = $41,360

    Equipment sale value = $20,000

    So, Book value = Equipment purchased - Accumulated depreciation

    = $50,000 - $41,360

    = $8,640

    Now, Capital Gain = Sale value - Book value = $20,000 - $8,640 = $11,360

    As, there is no Tax rate is given, so assume tax rate = X

    So, The amount of tax due = Capital gain * Tax rate

    = $11,360 * X

    If tax rate = 20%

    Then Amount of tax due = $11,360 * 20% = $2,272.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Phantom Corporation purchased equipment for $50,000, four years ago. The accumulated depreciation to date is $41,360. If they were able to ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers