An Asset Is Purchased on January 1 for $40,000

Multiple Choice

An asset is purchased on January 1 for $40,000.It is expected to have a useful life of five years after which it will have an expected salvage value of $5,000.The company uses the straight-line method.If it is sold for $30,000 exactly two years after it is purchased,the company will record a:

A) gain of $6,000.
B) gain of $4,000.
C) loss of $4,000.
D) loss of $6,000.