Hero had a delivery van which was destroyed in an accident. On that date, the carying amount of the van was P3, 000, 000. Onjuly 15, the entity receieved and recorded a P50, 000 invoice for a new engine installed in the van in May, and another 100, 000invoice for various repairs. In August, the entity receieved P4, 200, 000 under an insurance policy on the vn which it plans to useto replace the van. What amount should be reported as gain on disposal of the van in the income statement?A) 800,000B) oc) 700,000d) 600,000

Repair cost is an expense it is recorded as expenses in income statement. The gain or loss…

Answered: to replace the van. What amount should…

Business

Accounting

to replace the van. What amount should be reported as gain on disposal of the van in the income statement?

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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Question

Hero had a delivery van which was destroyed in an accident. On that date, the carying amount of the van was P3, 000, 000. On
july 15, the entity receieved and recorded a P50, 000 invoice for a new engine installed in the van in May, and another 100, 000
invoice for various repairs. In August, the entity receieved P4, 200, 000 under an insurance policy on the vn which it plans to use
to replace the van. What amount should be reported as gain on disposal of the van in the income statement?
A) 800,000
B) o
c) 700,000
d) 600,000

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