Using Excel (if applicable), Apple is now at the end of the final year of their...

Using Excel (if applicable),

Apple is now at the end of the final year of their new iPhone project. The equipment originally cost $550,000, of which 80% has been depreciated. Apple can sell the used equipment today for $100,000, and its tax rate is 21%. Will the company pay tax or receive a tax credit and how much?

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Expert Solution

Cost of Equipment (Original Cost)	$ 550,000
Depreciated part	80%
Accumulated Depreciation	$ 440,000
Book value of Equipment	$ 110,000
The sale price of the equipment	$ 100,000
Loss on sale	$ (10,000)
Since it is a loss, the company will get a tax credit on the loss. That is 21% of the loss	-
Tax rate	21%
Tax credit	$ 2,100

Excel formulas:

jeff jeffy answered 1 year ago

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