calculating the gain or loss on disposal
Business & Finance

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Genetic Insights Co. purchases an asset for $17,324. This asset qualifies as a sevenyear recovery asset under MACRS. The sevenyear fixed depreciation percentages for years 1, 2, 3, 4, 5, and 6 are 14.29%, 24.49%, 17.49%, 12.49%, 8.93%, and 8.93%, respectively. Genetic Insights has a tax rate of 30%. The asset is sold at the end of six years for $3,996. Calculate gain or loss on disposal.
Gain should be entered as positive number and loss should be entered as negative.
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Cost of asset =$17,324
Rate of deprecation for year 1 =14.29%
Deprecation for year (17,324*14.29%) =$2475.60
Carrying value at end of year 1(173242475.60) =$14848.4
Similarly, we can find the deprecation and carrying value up to year 6
Carrying value of year 2 is {14848.4*(10024.49)%} =$11,212.02
Carrying value of year 3 is {11212.02*(10017.49)%} =$9251.04
Carrying value of year 4 is {9251.04*(10012.49)%} =$8095.58
Carrying value of year 5 is {8095.58*(1008.93)%} =$7372.64
Carrying value of year 6 is {7372.64*(1008.93)%} =$6714.26
Selling price at end of year 6 is =$3,996
Loss on Sale of asset(39966714.26) =2718.26
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