A company purchased a computer that cost $10,000. It had an estimated useful life of five years and no residual value. The computer was depreciated by the straight-line method and was sold at the end of the second year of use for $5,000 cash. The company should record:
A) a loss of $1,000.
B) a gain 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.
Answer: A
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