An Asset's Book Value Is $36,000 on January 1,Year 6

question 116

Multiple Choice

An asset's book value is $36,000 on January 1,Year 6.The asset is being depreciated $500 per month using the straight-line method.Assuming the asset is sold on July 1,Year 7 for $25,000,the company should record:

• A)Neither a gain or loss is recognized on this type of transaction.
• B)A gain on sale of $2,000.
• C)A loss on sale of $1,000.
• D)A gain on sale of $1,000.
• E)A loss on sale of $2,000.

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Definitions:

Polymer Produced

A polymer produced is a large molecule, or macromolecule, composed of many repeated subunits, created through a process of polymerization.

Monomer

A small molecule that can react with similar or different molecules to form a polymer.

Cationic Polymerization

A type of polymerization where the growing polymer chain carries a positive charge, often initiated by an electrophilic compound.

Benzoyl Peroxide

Benzoyl peroxide is an organic compound used primarily as an acne treatment, known for its antibacterial properties, with the formula (C6H5CO)2O2.