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1) An asset's book value is $18,000 on December 31, Year 5

Accounting

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1) 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 $20,000, the company should record:

Select one:

a. Neither a gain nor a loss is recognized on this transaction.

b. A gain on sale of $2,000.

c. A gain on sale of $13,000.

d. A loss on sale of $13,000.

2) 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:

Multiple Choice

• A gain on sale of $3,000.

• A loss on sale of $3,000.

• Neither a gain nor a loss is recognized on this transaction.

• A gain on sale of $12,000.

• A loss on sale of $12,000.