An Asset Was Purchased for $24,000

question 102

Multiple Choice

An asset was purchased for $24,000. The asset's estimated useful life was 5 years, and its residual value was $4,000. The straight-line method of depreciation was used. Calculate the gain or loss on sale if the asset is sold for $18,000 at the end of the first year.

• A)$1,000 gain
• B)$2,000 loss
• C)no gain or no loss
• D)$2,000 gain

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Definitions:

Bird's Eye View

A view from above, typically at a high vantage point, giving a comprehensive overview of an area or layout.

Cavalier Oblique

A method of drawing in which an object is represented with its depth drawn at full scale, but the height and width are proportionally scaled, creating a distorted but useful perspective.

True Length

The actual length of a line or object, as opposed to its apparent length when viewed from an angle or through a projection.

Pictorial Sketching

Pictorial sketching is the artistic process of creating a three-dimensional representation of an object on a two-dimensional surface, offering a realistic view that helps in understanding the object's shape.