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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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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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