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25. A piece of equipment purchased on January 1, 2015 for $15,000 has a residual value of $3,000 and an estimated useful life of 6 years. The asset was depreciated straight- line for two years, then sold on January 1, 2017 for $9,000. What is the amount of the gain or loss that should be recorded? A) $3,000 loss B) $3,000 gain C) $2,000 loss D) $4,000 loss 26. In 2002, Company XX developed a patent, which has a 20 year legal life, and a 10 year useful life. How should Company XX account for the research and development costs (for scientists' salaries) that were incurred to develop the patent? A) capitalize and amortize over a 10 year period. B) expense as incurred. C) capitalize and amortize over a 20 year period. D) capitalize, but do not amortize. 27. If your company purchases land and a building for $100,000, and it intends to tear down the existing building to allow construction of a new warehouse, the purchase price should be allocated to the following accounts: A) $100,000 to the Construction Expense account B) $100,000 to the Land account and $0 to the Building account C) Prorated to the Land account and Building account based on the appraised values of each. D) $100,000 to the Building account and $0 to the Land account