The tax implication is 12000.
What is tax implication?
The tax implications are that you file a tax return and may be taxed on profits, if they exceed your expenses by the amount allowed by law.
Given,
the machine can be sell for 50,000
the book value is 20,000
tax implication = (50,000-20,000)*40%
=30000*40/100
= 12000
As there is capital gain, which means the company will have to pay taxes of 12,000. So, this is a liability of 12,000 which means the answer is = -12,000.00
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