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Company purchases a new punch press at a cost of $265,000. Delivery and installation cost $46,000....

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Accounting

Company purchases a new punch press at a cost of $265,000. Deliveryand installation cost $46,000. The machine has a useful life of12-years, but will depreciate using MACRS over a seven yearproperty class,

1. What is the cost basis of the machine

2. What will be the depreciation allowance each year over theseven years

3. If we sell the machine at the end of five years for$70,000, what will be the gain/loss tax assuming a 40% taxrate

4. What are the net-proceeds from the sale

Calculate and show all in Excel.

Answer & Explanation Solved by verified expert
4.4 Ratings (913 Votes)
1 cost basis purchase costall the expenses incurred to bringmachine into    See Answer
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