A company had a tractor destroyed by fire. The tractor originally cost $136,000
ID: 2480610 • Letter: A
Question
A company had a tractor destroyed by fire. The tractor originally cost $136,000 with accumulated depreciation of $69,900. The proceeds from the insurance company were $95,500. The company should recognize:
A loss of $29,400.
A gain of $29,400.
A loss of $66,100.
A gain of $66,100.
A gain of $95,500.
A company had a tractor destroyed by fire. The tractor originally cost $136,000 with accumulated depreciation of $69,900. The proceeds from the insurance company were $95,500. The company should recognize:
A loss of $29,400.
A gain of $29,400.
A loss of $66,100.
A gain of $66,100.
A gain of $95,500.
Explanation / Answer
A gain of $29,400.
book value on date= originally cost $136,000 - accumulated depreciation of $69,900=$66,100
The company should recognize=The proceeds from the insurance company were $95,500-Book value on date $66,100=A gain of $29,400.
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