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saul85 [17]
3 years ago
14

Equipment costing $b0000 was destroyed when it caught on fire. At the date of the fire, the accumulated depreciation on the equi

pment was $100000. An insurance check for $300000 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. credit to the Equipment account of $160000.
b. credit to the Accumulated Depreciation account for $100000.
c. gain on disposal of $140000.
d. gain on disposal of $40000.
Business
1 answer:
Musya8 [376]3 years ago
8 0

Answer: c. gain on disposal of $140000.

Explanation:

The cost of the equipment is $260,000.

When the fire occurred, the book value of the equipment was:

= Cost of equipment - Accumulated depreciation

= 260,000 - 100,000

= $160,000

A check of $300,000 was received from insurance. The gain on disposal is:

= Replacement cost - book value

= 300,000 - 160,000

= $140,000

This amount will be credited to the Gain on Disposal account because an increase is credited.

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Answer:

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Your boss has given you permission to order new office supplies answer
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3 years ago
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rewona [7]

Answer:

1.37

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The after tax cost of the debt = $1,000,000 x 7% x (1 - tax rate) = $1,000,000 x 7% x (1 - 21%) = $1,000,000 x 7% x 0.79 = $55,300

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