Chelonia Mydas purchased a machine for $500 000 three years ago. The machine can be fully depreciated for tax purposes over 5 years. The tax rate is 30 per cent. What is the carrying amount of this machine for tax purposes?

A) $200 000
B) $140 000
C) $100 000
D) $70 000

Question

Brianna DeWitt · Accepted Answer

Final Answer : A, Explanation :  The carrying amount for tax purposes after 3 years, given a 5-year full depreciation schedule, is $200,000. This is because each year, 20% (100%/5 years) of the machine's value is depreciated. After 3 years, 60% of the machine's value has been depreciated, leaving 40% of the original value. 40% of $500,000 is $200,000.

Chelonia Mydas purchased a machine for $500 000 three years ago. The machine can be fully depreciated for tax purposes over 5 years. The tax rate is 30 per cent. What is the carrying amount of this machine for tax purposes?

A) $200 000
B) $140 000
C) $100 000
D) $70 000

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Chelonia Mydas purchased a machine for $500 000 three years ago. The machine can be fully depreciated for tax purposes over 5 years. The tax rate is 30 per cent. What is the carrying amount of this machine for tax purposes?A) $200 000B) $140 000C) $100 000D) $70 000

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Learning Objectives

Learning Objectives

Related questions

Chelonia Mydas purchased a machine for $500 000 three years ago. The machine can be fully depreciated for tax purposes over 5 years. The tax rate is 30 per cent. What is the carrying amount of this machine for tax purposes?

A) $200 000
B) $140 000
C) $100 000
D) $70 000