A company had a bulldozer destroyed by fire.The bulldozer originally cost $125,000.The accumulated depreciation on it was $60,000.The proceeds from the insurance company were $90,000.The company should recognize:
A)A loss of $25,000.
B)A gain of $25,000.
C)A loss of $65,000.
D)A gain of $65,000.
E)A gain of $90,000.

Question

Quizplus · Accepted Answer

The book value of the bulldozer is $125,000 - $60,000 = $65,000. The insurance proceeds are $90,000. Therefore, the gain is $90,000 - $65,000 = $25,000.

A Company Had a Bulldozer Destroyed by Fire