A Machine Costing $176000 Was Destroyed When It Caught Fire

question 72

Multiple Choice

A machine costing $176000 was destroyed when it caught fire.At the date of the fire the accumulated depreciation on the machine was $80000.An insurance check for $200000 was received based on the replacement cost of the machine.Recording the insurance proceeds and the disposition of the machine will include a(n)

• A)gain on disposal of $24000.
• B)decrease to Equipment for $120000.
• C)increase to Accumulated Depreciation for $80000.
• D)gain on disposal of $104000.

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