Reference no: EM131215743
Cost Accumulated Depreciation Cash Proceeds Fair Market Value Nature of disposition
Land $40,000 $31,000 $31,000 Condemnation
Building 15,000 3,600 Demolition
Warehouse 70,000 11,000 74,000 74,000 Destruction by fire
Furniture 10,000 7,850 3,100 Contribution
Automobile 8,000 3,460 2,960 2,960 Sale
The following additional information is availabe:
Land: On February 15, a condemnation award was received as consideration for unimpoved land held primarily as an investment, and on March 31, another parcel of unimproved land to be held as an investment was purchased at a cost of $35,000.
Building: On April 2, land and building were purchased at a total cost of $75,000, of which 20% was allocated to the building on the coporate books. The real estate was acquired with the intention of demolishing the building, and this was acomplished during the month of November. Cash proceeds received in Novemeber represent the net proceeds from demolition of the building.
Warehouse: On June 30, the warehouse was destroyed by fire. The warehouse was purchased January 2, 1995, and had depreciated $11,000. On December 27, the insurance proceeds and other funds were used to purchase a replacement warehouse at a cost of $90,000.
Furniture: On august 15, furniture was contributed to a qualified charitable organization. No other contributions were made or pledged during the year.
Automobile: On November 3, the automobile was sold to Ozzie Guillen, a stockholder.
Instructions: Indicate how these items would be reported on the income statement of Frank Thomas Company.
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