When a capital asset with a 5-year estimated useful life is sold during the second year, how would the use of the SYD method of amortization, instead of the straight-line method, affect the gain or loss on the sale? $\begin{array}{|l|l|l|}
\hline &\text { Gain } & \text { Loss } \
\hline1& \text { No effect } & \text { No effect } \
\hline 2&\text { Increase } & \text { Increase } \
\hline 3&\text { Decrease } & \text { ncrease } \
\hline4& \text { nncrease } & \text { Decrease } \
\hline
\end{array}$

Question

Quizplus · Accepted Answer

The SYD method accelerates depreciation, resulting in a higher accumulated depreciation and lower book value in the early years compared to the straight-line method. This leads to a higher gain or lower loss on sale.

When a Capital Asset with a 5-Year Estimated Useful Life