An Asset Was Acquired on January 1, 2018, for $15,000

question 25

Multiple Choice

An asset was acquired on January 1, 2018, for $15,000 with an estimated 4-year life and $1,000 residual value. The company uses straight-line depreciation. Calculate the gain or loss if the asset was sold on December 31, 2020, for $5,000.

• A) $500 gain.
• B) $3,000 loss.
• C) $1,500 gain.
• D) $500 loss.

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Definitions:

Xerox Machine

A brand of photocopier that uses a dry copying process to reproduce documents and images.

Photocopier

A machine that makes copies of documents and other visual images onto paper or plastic film quickly and cheaply.

Heuristics

Mental shortcuts or rules of thumb that simplify decision making but do not guarantee a correct outcome.

Anthrax

A serious infectious disease caused by Bacillus anthracis bacteria, which can be found naturally in soil and commonly affects domestic and wild animals.