Ocean Corp.'s comprehensive insurance policy allows its assets to be replaced at current value. The policy has a $50,000 deductible clause. Oneof Ocean's waterfront warehouses was destroyed in a winter storm. Such storms occur approximately every four years. Ocean incurred $20,000 ofcosts in dismantling the warehouse and plans to replace it. The tax rate is 30%. The following data relate to the warehouse:Current carrying amount $300,000Replacement costUnder U.S. GAAP, what amount of gain should Ocean report as a separate component of income from continuing operations?1,100,000

Given,Deductible clause- $50,000Dismantling cost- $20,000Tax Rate - 30%To be determined,The amount…

Answered: Ocean Corp.'s comprehensive insurance…

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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