[Answer] On January 3 2010 Boyer Corp. owned a machine that had cost $200 000. The accumulated depreciation was $120 000 estimated salvage value was $12 000 and fair market value was $320 000. On January 4 2010 this machine was irreparably damaged by Pine Corp. and became worthless. In October 2010 a court awarded damages of $320 000 against Pine in favor of Boyer. At December 31 2010 the final outcome of this case was awaiting appeal and was therefore uncertain. However in the opinion of Boyer’s attorney Pine’s appeal will be denied. At December 31 2010 what amount should Boyer accrue for this gain contingency?a. $320 000.b. $260 000.c. $200 000.d. $0.

Answer: d
On January 3 2010 Boyer Corp. owned a machine that had cost $200 000. The accumulated depreciation was $120 000 estimated salvage value was $12 000 and fair market value was $320 000. On January 4 2010 this machine was irreparably damaged by Pine Corp. and became worthless. In October 2010 a court awarded damages of $320 000 ag…

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