You Own Some Equipment Which You Purchased Three Years Ago

question 35

Multiple Choice

You own some equipment which you purchased three years ago at a cost of €135,000.The equipment has been depreciated using reducing balances of 20% per annum.You are considering
Selling the equipment today for €82,500.Which one of the following statements is correct if your
Tax rate is 34%?

• A)The tax due on the sale is €4,549.20.
• B)The book value today is €8,478.
• C)The book value today is €64,320.
• D)The taxable amount on the sale is €38,880.
• E)You will receive a tax refund of €13,219.20 as a result of this sale.

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Definitions:

Continuation of Benefits

A policy or practice ensuring employees continue to receive certain benefits, such as health insurance, even after employment termination or during a leave of absence.

Successful Merger

The process wherein two or more companies combine effectively, realizing synergies to achieve enhanced performance and value.

Rogers Communications

A Canadian communications and media company that operates primarily in the fields of wireless communications, cable television, telephony, and Internet connectivity.

Job Losses

The elimination of positions within a company or economy, often resulting from downsizing, automation, or economic downturns.