A company had a tractor destroyed by fire. The tractor originally cost $136,000 with accumulated depreciation of $69,900. The pr
oceeds from the insurance company were $31,000. The company should recognize
1 answer:
Answer: A loss of $35,100
Step-by-step explanation:
The tractor had cost $136,000 and had accumulated a depreciation of $69,900.
This means that the net book value of the tractor was:
= 136,000 - 69,900
= $66,100
The insurance company was supposed to give them this amount but instead gave them $31,000. They will therefore suffer a loss of:
= 66,100 - 31,100
= $35,100
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