DISPOSITION OF A DAMAGED COMPUTER. The computer room of Pierce Systems, Inc., was flooded recently when a water pipe on the floor above broke. The computer was running when the water flooded the area, and it was seriously damaged.

Pierce’s insurance company has agreed to pay Pierce $350,000 and to take possession of the damaged computer. Pierce’s accounting records include the following data for the computer:

REQUIRED:
Record the disposition of the computer in Pierce’s journal.

Transcribed Image Text:

Cost Accumulated depreciation (through date of damage) $480,000 120,000