Arnold, Inc

Multiple Choice

Arnold, Inc. purchased a truck on January 1, 2009, for $40,000. The truck had an estimated life of 5 years and an estimated salvage value of $5,000. Arnold Inc. used the straight-line method to depreciate the asset. On July 1, 2012, the truck was sold for $7,000 cash. The journal entry to record the sale of the truck in 2012:

A) decreases equity.
B) increases total assets.
C) decreases total expenses.
D) increases net income.