Amanda Company Purchased a Computer That Cost $10,000

question 114

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. Which of the following statements correctly describes the computer sale?

• A)Assets and stockholders' equity both increase by $5,000.
• B)Assets decrease $5,000 and stockholders' equity is not affected.
• C)Assets and stockholders' equity both decrease by $400.
• D)Assets and stockholders' equity both increase by $400.

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Definitions:

Senior

Refers to an individual of advanced age or to a person holding a high and often authoritative position, especially in a business or academic setting.

Mean Age

The average age of the individuals in a given population or sample.

Registered Voters

Individuals who have officially enrolled on an electoral roll, making them eligible to vote in elections.

Sampling Plan

A detailed strategy or methodology that outlines how samples will be taken from a population for the purpose of conducting research or quality control.