A Truck Costing $110,000 Was Destroyed When Its Engine Caught

question 77

Multiple Choice

A truck costing $110,000 was destroyed when its engine caught fire.At the date of the fire, the accumulated depreciation on the truck was $50,000.An insurance check for $125,000 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 credit to

• A)Gain on Disposal of $15,000.
• B)Truck of $60,000.
• C)Accumulated Depreciation of $50,000.
• D)Gain on Disposal of $65,000.

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Definitions:

Negative Profitability

A financial situation where a business or organization incurs more expenses than revenues, leading to a net loss.

Product Life Cycle

A concept that describes the stages a product goes through from introduction to growth, maturity, and decline in the market.

Industry

A group of companies that operate in the same segment of the economy, producing or providing similar products, services, or sources of revenue.

Price-Based Competition

A competitive strategy focusing on setting prices lower than competitors to attract price-sensitive customers.