Calculate the profit or loss on the sale

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Reference no: EM133001526

Problem - After-tax cash flows; profit or loss on disposal: manufacturer - In year 1, Expert Chemicals purchased a forklift truck for $300 ooo, and at the end of year 3 sold it for $55 530. At the time of sale, $235 0/0 in accumulated depreciation had been recorded. Note the accumulated depreciation is the same for accounting and tax purposes.

Required -

1 What was the forklift's carrying amount at the time of sale?

2. Calculate the profit or loss on the sale.

3. Determine the after tax cash flow from the sale of the forklift. The firm's tax rate is 40 per cent.

Reference no: EM133001526

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