At January 1, 2020, Neon Corp

question 1

Multiple Choice

At January 1, 2020, Neon Corp. owned a machine that had cost $ 100,000. The accumulated depreciation to date was $ 60,000, estimated residual value was $ 6,000, and fair value was $ 160,000. On January 4, 2020, this machine suffered major damage due to Argon Corp.'s actions and was written off as worthless. In October 2020, a court awarded damages of $ 160,000 against Argon in favour of Neon. At December 31, 2020, the final outcome of this case was awaiting appeal and was, therefore, uncertain. However, in the opinion of Neon's attorney, Argon's appeal will be denied. At December 31, 2020, what amount should Neon accrue for this gain contingency?

• A) $ 160,000
• B) $ 130,000
• C) $ 100,000
• D) $ 0

---

Definitions:

Alternation Ranking

A method of evaluating employees where individuals are compared and ranked alternately in terms of best and worst performance.

Performance Measurement

Performance measurement involves the evaluation of the effectiveness and efficiency of an individual, group, or organization's work activities and results.

Simple Ranking

Method of performance measurement that requires managers to rank employees in their group from the highest performer to the poorest performer.

Peer Feedback

The process of giving or receiving information about performance from one's work colleagues, intended to foster improvement and learning.