Amanda Company Purchased a Computer That Cost $10,000

question 127

Multiple Choice

Amanda Company purchased a computer that cost $10,000.It had an estimated useful life of five years and a residual value of $1,000.The computer was depreciated by the straight-line method and was sold at the end of the third year of use for $5,000 cash. How much of a gain or loss should Amanda record?

• A)A gain of $1,000.
• B)A loss of $5,000.
• C)A gain of $400.
• D)A loss of $400.

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Definitions:

Start-up

A new business venture in its early stages, typically characterized by high uncertainty and potential for growth.

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A multinational technology company specializing in Internet-related services and products, including online search, advertising, and software.

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An international coffee company and coffeehouse chain known for its specialty coffee and espresso drinks.

Start-up

A company in the early stages of its operations, often innovating in its industry or market with high growth potential.