An Asset's Book Value Is $18,000 on December 31,Year 5

question 107

Multiple Choice

An asset's book value is $18,000 on December 31,Year 5.The asset has been depreciated at an annual rate of $3,000 on the straight-line method.Assuming the asset is sold on December 31,Year 5 for $15,000,the company should record:

• A)A loss on sale of $12,000.
• B)A gain on sale of $12,000.
• C)Neither a gain nor a loss is recognized on this transaction.
• D)A gain on sale of $3,000.
• E)A loss on sale of $3,000.

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Definitions:

Pancreatic Beta Cells

Pancreatic beta cells are cells located in the islets of Langerhans in the pancreas that produce and release insulin, a hormone that regulates blood sugar levels.

Thyroid Hormone

A hormone produced by the thyroid gland that regulates metabolism, energy generation, and growth and development in the body.

Anterior Pituitary

The anterior, glandular lobe of the pituitary gland; functions as a classical endocrine gland; secretes growth hormone, prolactin, melanocyte-stimulating hormone, and several tropic hormones. Compare with posterior pituitary.

TSH

Thyroid-Stimulating Hormone, a hormone produced by the pituitary gland that regulates the production of thyroid hormones.