Use the Information Below to Answer the Following Questions

question 26

Multiple Choice

Use the information below to answer the following questions.
Alby Ltd purchased a machine for $32,000 on 1 January 2010. The machine was expected to have a useful life of 4 years. The financial year ends on 31 December. The straight-line method of depreciation is employed.
-A machine purchased on 1 July 2010 cost $100 000 and has a zero estimated salvage value.The useful life of the machine is 5 years.If the machine was sold on 30 September 2012,what would its net book value be?

• A) $45 000
• B) $50 000
• C) $55 000
• D) $60 000.

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Definitions:

Marginal Tax Rate

Refers to the rate at which the next dollar of taxable income is taxed.

Tax Cuts

Reductions in the amount of taxes that individuals or corporations must pay to the government.

Proportional

Proportional describes a relationship or ratio that maintains the same relative size or aspect between items or variables.

Regressive

Refers to a tax system in which the tax rate decreases as the taxable amount increases, often placing a heavier burden on low-income earners.