Kovacic Company Purchased a Computer That Cost $10,000

question 4

Multiple Choice

Kovacic Company purchased a computer that cost $10,000.It had an estimated useful life of five years and residual value of $0.The computer was depreciated by the straight-line method and was sold at the end of the fourth year of use for $3,000 cash.What should Kovacic record?

• A)A gain of $1,000.
• B)A loss of $1,000.
• C)Neither a gain nor a loss-the computer was sold at its book value.
• D)Neither a gain nor a loss-the gain that occurred in this case would not be recognized.

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Definitions:

Conniving

Acting in a scheming or deceitful way, often with the intention to achieve an end through trickery or manipulation.

Associating

The process of connecting thoughts, feelings, or ideas together in the mind or in relationships with others.

Self-Handicapping

A strategy where individuals create obstacles and excuses for themselves so that if they do poorly on a task, they can avoid blaming themselves.

Self-Reference Effect

This refers to the tendency for individuals to better remember information that is personally relevant to them, making it more likely to be recalled than non-self-relevant information.