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Amanda Company purchased a computer that cost $11,800. It had an estimated useful life of...

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Accounting

Amanda Company purchased a computer that cost $11,800. It had an estimated useful life of five years and a residual value of $1,900. The computer was depreciated by the straight-line method and was sold at the end of the third year of use for $5,900 cash. Which of the following statements correctly describes the computer sale?

Assets decrease $5,900 and stockholders equity is not affected.

Assets and stockholders equity both increase by $40.

Assets and stockholders equity both increase by $5,900.

Assets and stockholders equity both decrease by $40.

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