A Truck Costing $32,000 Was Destroyed When Its Engine Caught

question 17

Multiple Choice

A truck costing $32,000 was destroyed when its engine caught fire.At the date of the fire, the accumulated depreciation on the truck was $16,000.An insurance cheque for $37,000 was received based on the replacement cost of the truck.The entry to record the insurance proceeds and the disposition of the truck will include a

• A)gain on disposal of $5,000.
• B)credit to the Truck account for $16,000.
• C)credit to the Accumulated Depreciation account for $16,000.
• D)gain on disposal of $21,000.