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Straw Dog Inc owned equipment that had purchased for $300,000. The accumulated depreciation was $200,000, with a salvage value was $18,000, and fair value was
Straw Dog Inc owned equipment that had purchased for $300,000. The accumulated depreciation was $200,000, with a salvage value was $18,000, and fair value was $780,000. On January 21,2022 , this equipment was irreparably damaged by Astronaut, LLC and became worthless. In November 2022, a court awarded damages of $780,000 against Astronaut, LLC in favor of Straw Dog Inc. At December 31, 2022, the final outcome of this case was awaiting appeal and was, therefore, uncertain. However, in the opinion of Straw Dog's attorney, Astronaut LLC's appeal will be denied. At December 31, 2021, what amount should Straw Dog Inc accrue for this gain contingency? a. $100,000 b. $18,000 C. $780,000 d. $0
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