A Machine Costing $132,000 Was Destroyed When It Caught Fire

question 48

Multiple Choice

A machine costing $132,000 was destroyed when it caught fire. At the date of the fire, the accumulated depreciation on the machine was $60,000. An insurance check for $150,000 was received based on the replacement cost of the machine. The entry to record the insurance proceeds and the disposition of the machine will include a

• A) gain on disposal of $18,000.
• B) credit to the Equipment account for $72,000.
• C) credit to the Accumulated Depreciation account for $60,000.
• D) gain on disposal of $78,000.