On January 3, 2010, Boyer Corp. owned a machine that had cost $200,000. The accumulated depreciation was $120,000, estimated salvage value was $12,000, and fair market value was $320,000. On January 4, 2010, this machine was irreparably damaged by Pine Corp. and became worthless. In October 2010, a court awarded damages of $320,000 against Pine in favor of Boyer. At December 31, 2010, the final outcome of this case was awaiting appeal and was, therefore, uncertain. However, in the opinion of Boyer's attorney, Pine's appeal will be denied. At December 31, 2010, what amount should Boyer accrue for this gain contingency? O 200,000 O 260,000 None of these O 320,000

On January 3, 2010, Boyer Corp. owned a machine that had cost $200,000. The accumulated depreciation was $120,000, estimated salvage value was $12,000, and fair market value was $320,000. On January 4, 2010, this machine was irreparably damaged by Pine Corp. and became worthless. In October 2010, a court awarded damages of $320,000 against Pine in favor of Boyer. At December 31, 2010, the final outcome of this case was awaiting appeal and was, therefore, uncertain. However, in the opinion of Boyer's attorney, Pine's appeal will be denied. At December 31, 2010, what amount should Boyer accrue for this gain contingency? O 200,000 O 260,000 None of these O 320,000

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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Please solve this problem
vvv Limited purchased a machine for $300,000 cash on 1 July 2005. The useful life of the machine is 10 years, no residual value and straight line method for depreciation. The company uses the revaluation model. On 31 December 2005, the fair value was $332,500 for the machine. On 31 December 2006, the fair value was $280,500 for the machine. The machine has a fair value of $302,250 on 31 December 2007 and $250,950 on 31 December 2008. Required: Provide the journal entries related to machine.
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