Equipment costing $280000 was destroyed when it caught on fire. At the date of t
ID: 2511720 • Letter: E
Question
Equipment costing $280000 was destroyed when it caught on fire. At the date of the fire, the accumulated depreciation on the equipment was $112000. An insurance check for $320000 was received based on the replacement cost of the equipment. The entry to record the insurance proceeds and the disposition of the equipment will include a
gain on disposal of $152000.
gain on disposal of $40000.
credit to the Equipment account of $168000.
credit to the Accumulated Depreciation account for $112000.
gain on disposal of $152000.
Explanation / Answer
Entry to record insurance proceeds and disposition of the equipment :
so answer is a) gain on disposal of $152000
Date accounts & explanation debit credit Accumlated depreciation 112000 Cash 320000 Equipment 280000 Gain on disposal 152000 (To record disposition of equipment)Related Questions
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