Answer :
Net salvage value = $147,490
Explanation :
As per the data given in the question,
Cost of equipment = $287,600
Expire time = 2 years
Depreciation rate for first 2 years = 0.20, 0.32
Based on the above information, we need to do following calculations which are shown below:
Total accumulated depreciation of equipment = Cost × Accumulated depreciation rate
= $287,600 × (0.20 + 0.32)
= $149,552
Book value of equipment at the end of 2 years = Cost - Accumulated Depreciation of equipment
= $287,600 - $149,552
= $138,048
Selling price = $150,000
Capital gain on sale = Selling price - Book value
= $150,000 - $138,048
= $11,952
And Tax rate = 21%
So
Capital gain tax is
= $11,952 × 21%
= $2,509.92
= $2,510
Net salvage value = Selling price - Capital gain tax
= $150,000 - $2,510
= $147,490
