Abbott Company Purchased a Computer That Cost $10,000

Abbott Company purchased a computer that cost $10,000. It had an estimated useful life of 5 years and no residual value. The computer was depreciated by the straight-line method and was sold at the end of the fourth year of use for $3,000 cash. Abbott should record:

A) a gain of $1,000.
B) a loss 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.$10,000/5 = depreciation of $2,000 per year. After four years, the book value would be $10,000 - ($2,000 x 4 years) = $2,000. The asset was sold for $3,000 or a $1,000 gain over book value.