1. An asset is purchased on January 1 for $46,700. It is expected to have a useful life of five years after which it will have an expected residual value of $6,400. The company uses the straight-line method. If it is sold for $32,800 exactly two years after it is purchased, the company will record a:

gain of $11,680.

gain of $2,220.

loss of $2,220.

loss of $11,680.

2. Your company has net sales revenue of $40 million during the year. At the beginning of the year, fixed assets are $12 million. At the end of the year, fixed assets are $14 million. What is the fixed asset turnover ratio?

2.86

3.33

1.54

3.08