1. Alliance Products purchased equipment that cost $120,000. It had an estimated useful life of four years and no residual value. The equipment was depreciated by the straight-line method and was sold at the end of the third year of use for $25,000 cash. Alliance should record:

   		A gain of $5,000.
   		A loss of $5,000.
   		Neither a gain nor a loss since the computer was sold at its book value.
   		Neither a gain nor a loss since the gain would not be recognized.