Ocean Corp.’s comprehensive insurance policy allows its assets to be replaced at current value. The policy has a

$50,000 deductible clause. One of Ocean’s waterfront warehouses was destroyed in a winter storm. Such storms occur approximately every four years. Ocean incurred

$20,000 of costs in dismantling the warehouse and plans to replace it. The following data relate to the warehouse:

Current carrying amount $ 300,000 Replacement cost 1,100,000 What amount of gain should Ocean report as a separate component of income before extraordinary items?

a. $1,030,000

b. $ 780,000

c. $ 730,000

d. $0