What are the net proceeds from the sale of this asset

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Reference no: EM132049041

Dimar Manufacturing Corp. is a custom sheet metal fabricator in the Buffalo area. To better meet their customer needs, they have just invested in a high capacity, large form hydraulic bending machine which cost $89,000. This equipment has a useful life of 10 years and a salvage value that is 12% of the cost basis at the end of its useful life. This machine is classified as a 7 years MACRS class asset for depreciation purposes. Dimar’s pays 21% infederal taxes and 7.1% in New York State taxes.

(a) If Dimar was to sell this equipment at the end of year 4 for $20,000, how much of a gain or loss would the company realize on this sale?

(b) What are the net proceeds (after tax) from the sale of this asset?

Reference no: EM132049041

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