Smith Manufacturing is considering the sale of two non depreciable assets, A and B. Asset A was purchased for $2000 and will be sold today for $2250. Asset B was purchased for $30,000 and will be sold today for $35000. The firm is subject to a 40% tax rate on capital gains.

Question

Smith Manufacturing is considering the sale of two non depreciable assets, A and B.  Asset A was purchased for $2000 and will be sold today for $2250.  Asset B was purchased for $30,000 and will be sold today for $35000.  The firm is subject to a 40% tax rate on capital gains.

1.  Calculate the amount of capital gain realized on each of the assets.

Answer:  I got $250 for A and $3000 for B

2.  Calculate the tax on the sale of each asset.

Answer:  Need help please...thanks!

SraJMcGin · Answer

I can see the $250 but not the $3000? I see $5,000? Now take 40% of each total for the tax on each one. Sra