An asset is purchased on January 1 for $40,000. It is expected to have a useful life of five years after which it will have an expected salvage value of $5,000. The company uses the straight -line method. If it is sold for $30,000 exactly two years after its purchased, the company will record a:
A) gain of $6,000.
B) gain of $4,000.
C) loss of $4,000.
D) loss of $6,000.

Question

Quizplus · Accepted Answer

The Answer of An asset is purchased on January 1 for $40,000. It is expected to have a useful life of five years after which it will have an expected salvage value of $5,000. The company uses the straight -line method. If it is sold for $30,000 exactly two years after its purchased, the company will record a:
A) gain of $6,000.
B) gain of $4,000.
C) loss of $4,000.
D) loss of $6,000.

An Asset Is Purchased on January 1 for $40,000