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:

HPG Axis

The hypothalamic-pituitary-gonadal axis, a system of hormone interactions that regulate reproductive and sexual development.

Secular Trend

A pattern in which the average age of puberty in developed countries declines across decades.

Growth Hormone

A protein hormone secreted by the pituitary gland that stimulates growth, cell reproduction, and regeneration in humans and other animals.

Hypothalamus

A region of the brain that regulates many bodily functions, including hunger, thirst, temperature, and the release of hormones.