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FASB Codification Case #6 Statement of Cash Flow Reporting Insurance Proceeds Facts On June 1,...

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Question

Accounting

FASB Codification Case #6

Statement of Cash Flow

Reporting Insurance Proceeds

Facts

On June 1, YR01 a tornado completely destroyed a storage warehouse owned by Target Inc. The

warehouse had a cost basis of $1,000 and accumulated depreciation of $400. Insurance proceeds

of $1,200 were received from Targets insurance company.

Question

Should the $1,200 of cash proceeds from the insurance policy be reported on Targets statement

of cash flow? If so, how?

Required

1. With respect to the statement of cash flow, provide a brief written description of the proper

reporting of the $1,200 cash received from insurance.

2. Identify the specific paragraph of the FASB Codification which addresses this issue and

submit a printout of this paragraph with your solution.

Grade Value

This case counts as a bonus question (maximum 2 percentage points) for examination #3.

You must work independently on this case (this is not a group project).

Answer & Explanation Solved by verified expert
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