Equipment Costing $210,000 Was Destroyed When It Caught on Fire

question 194

Multiple Choice

Equipment costing $210,000 was destroyed when it caught on fire. At the date of the fire, the accumulated depreciation on the equipment was $84,000. An insurance check for $240,000 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

• A) gain on disposal of $30,000.
• B) credit to the Equipment account of $126,000.
• C) credit to the Accumulated Depreciation account for $84,000.
• D) gain on disposal of $114,000.

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Definitions:

NYSE

New York Stock Exchange; a leading global stock exchange where shares of public companies are bought and sold.

Dealer Market

A dealer market is a financial market mechanism in which dealers buy and sell securities for their own accounts, providing liquidity and pricing to the market.

Over-the-counter (OTC) Market

A decentralized market where securities are traded directly between two parties without the supervision of an exchange.

Real Estate Market

The market segment in which land and the buildings on it are bought, sold, or rented, involving residential, commercial, and industrial properties.