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Question #4 (disposition of assets) On December 31, Year 1, The Company has a machine...

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Accounting

Question #4 (disposition of assets) On December 31, Year 1, The Company has a machine with a book value of $1,880,000. The original cost was $2,600,000 and accumulated depreciation waws 720,000 for a book value (carrying value) of $1,880,000. Depreciation is $120,000 per year on a straight-line basis. Each of the following independent situations involves disposing of the this piece of machinery. a. A fire completely destroyed the machine on March 31, Year 2. The insurance settlement will be $860,000 b. On April 1, Year 2, The Company sold the machine for $2,080,000. c. On July 31, Year 2, The Company donated the machine to the University of Idaho. The fair value of the machine at the time of the donation was estimated to be $2,200,000

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