On January 3, 2018, Crane Company owned a machine that had cost $396000. The accumulated depreciation was $239000, estimated salvage value was $23900, and fair value was $638000. On January 4, 2018, this machine was irreparably damaged by Wildhorse and became worthless. In October 2018, a court awarded damages of $480000 against Wildhorse in favor of Crane. At December 31, 2018, the final outcome of this case was awaiting appeal and was, therefore, uncertain. However, in the opinion of Crane's attorney, Wildhorses appeal will be denied. At December 31, 2018, what amount should Crane accrue for this gain contingency?

$0.

$638000.

$518500.

$399000.