An Asset's Book Value Is $18,000 on December 31,Year 5

question 107

Multiple Choice

An asset's book value is $18,000 on December 31,Year 5.The asset has been depreciated at an annual rate of $3,000 on the straight-line method.Assuming the asset is sold on December 31,Year 5 for $15,000,the company should record:

• A)A loss on sale of $12,000.
• B)A gain on sale of $12,000.
• C)Neither a gain nor a loss is recognized on this transaction.
• D)A gain on sale of $3,000.
• E)A loss on sale of $3,000.

---

Definitions:

Depresses Mandible

The action that lowers the lower jaw, typically involving muscles like the digastric muscle.

Temporalis

A broad, fan-shaped muscle on each side of the head that aids in chewing by elevating the mandible (lower jaw).

Extensor Digitorum Longus

A muscle in the lower leg that helps to extend the toes and dorsiflex the foot.

Vastus Medialis

A muscle in the quadriceps femoris group, located on the inner part of the thigh, that extends the knee.