An Asset's Book Value Is $18,000 on June 30,Year 6

question 66

Multiple Choice

An asset's book value is $18,000 on June 30,Year 6.The asset is being depreciated at an annual rate of $3,000 on the straight-line method.Assuming the asset is sold on December 31,Year 7 for $15,000,the company should record:

• A)A loss on sale of $1,500.
• B)A gain on sale of $1,500.
• C)Neither a gain nor a loss is recognized on this type of transaction.
• D)A gain on sale of $3,000.
• E)A loss on sale of $3,000.

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Definitions:

Foreseeable

The quality of being able to predict or anticipate an event as likely to happen based on available information.

Performing

The act of carrying out or accomplishing tasks, actions, or performances as required or expected.

Discharged

In legal terms, this means that a debt has been paid off or obligations have been fulfilled, releasing the debtor from further responsibilities.

Agreement

A mutual understanding or arrangement between two or more parties, often formalized by a contract, outlining terms and conditions of a relationship.