A MACHINE COSTING $171,600 WAS DESTROYED WHEN IT CAUGHT FIRE. AT THE DATE OF THE FIRE, THE ACCUMULATED DEPRECIATION ON THE MACHINE WAS $84,000. AN INSURANCE CHECK FOR $203,800 WAS RECEIVED BASED ON THE REPLACEMENT COST OF THE MACHINE. THE ENTRY TO RECORD THE INSURANCE PROCEEDS AND THE DISPOSITION OF THE MACHINE WILL INCLUDE A: A) GAIN ON DISPOSAL OF $116,200. B) CREDIT TO THE ACCOUNT FOR $119,800. EQUIPMENT C) GAIN ON DISPOSAL OF $32,200. D) CREDIT TO THE ACCUMULATED DEPRECIATION ACCOUNT FOR $84,000.
A MACHINE COSTING $171,600 WAS DESTROYED WHEN IT CAUGHT FIRE. AT THE DATE OF THE FIRE, THE ACCUMULATED DEPRECIATION ON THE MACHINE WAS $84,000. AN INSURANCE CHECK FOR $203,800 WAS RECEIVED BASED ON THE REPLACEMENT COST OF THE MACHINE. THE ENTRY TO RECORD THE INSURANCE PROCEEDS AND THE DISPOSITION OF THE MACHINE WILL INCLUDE A: A) GAIN ON DISPOSAL OF $116,200. B) CREDIT TO THE ACCOUNT FOR $119,800. EQUIPMENT C) GAIN ON DISPOSAL OF $32,200. D) CREDIT TO THE ACCUMULATED DEPRECIATION ACCOUNT FOR $84,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A MACHINE COSTING $171,600 WAS
DESTROYED WHEN IT CAUGHT FIRE.
AT THE DATE OF THE FIRE, THE
ACCUMULATED DEPRECIATION ON THE
MACHINE WAS $84,000. AN INSURANCE
CHECK FOR $203,800 WAS RECEIVED
BASED ON THE REPLACEMENT COST OF
THE MACHINE. THE ENTRY TO RECORD
THE INSURANCE PROCEEDS AND THE
DISPOSITION OF THE MACHINE WILL
INCLUDE A:
A) GAIN ON DISPOSAL OF $116,200.
B) CREDIT TO THE
ACCOUNT FOR $119,800.
EQUIPMENT
C) GAIN ON DISPOSAL OF $32,200.
D)
CREDIT TO THE ACCUMULATED
DEPRECIATION ACCOUNT FOR $84,000.
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