Disposal Inc., a company operating in Canada, had before-tax income of $140 000, excluding CCA charges, in 2000. Just before the end of the tax year, the company sold an asset that originally cost $120 000 for $140 000. This was the only Class 8 asset that it owned. Just prior to the time of sale, the Class 8 balance was $60 000. Class 8 assets are depreciated at an annual declining-balance rate of 20%, and 50% of capital gains are taxable at the corporate income tax rate. Taking into consideration the sale of the asset, and given a corporate income tax rate of 40%, determine the taxes payable in 2000.
a) $86 000
b) $38 000
c) $74 000
d) $84 000
e) $76 000