D104 Intermediate Accounting II Units 2- 3 EXAMS

nvoluntary conversion - The termination of an asset's service as a result of some type of unwanted or unexpected event, such as fire, flood, theft, or condemnation. Companies report the difference between the amount recovered from the involuntary conversion, if any, and the asset's book value as a gain or loss. In rare cases, these gains or losses are reported as extraordinary items in the income statement. If a company scraps or abandons an asset without any cash recovery, it recognizes a loss equal to the asset's - book value If scrap value exists, the gain or loss that occurs is the difference between the asset's - scrap value and book value accumulated (depreciation for machinery) - contra asset (normal credit balance) net book value= - original cost - accumulated depreciation to reflect gain on balance sheet add it as a - credit straight line depreciation - (cost - salvage value) / useful life Delta River Company sold manufacturing equipment with a cost of $44,000 and accumulated depreciation of $32,000 for $9,000. What should be included