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On January 3, 2018, Hufflepuff Corp. owned a machine that had cost $400,000. The accumulated depreciation was 240,000, estimated salvage value was $24,000, and fair
On January 3, 2018, Hufflepuff Corp. owned a machine that had cost $400,000. The accumulated depreciation was 240,000, estimated salvage value was $24,000, and fair value was $640,000. On January 4, 2018, this machine was irreparably damaged by Bellatrix Corp. and became worthless. In October 2018, a court awarded damaged of $480,000 against Bellatrix in favor of Hufflepuff. At December 312018, the final outcome of this case was awaiting appeal and was, therefore, uncertain. However, in the opinion of Hufflepuffs attorney, Bellatrix's appeal will be denied. At December 31, 2018, what amount, if any should Hufflepuff assure for this contingency? A. $640,000 B. $520,000 C. $400,000 D. $0
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