When a Capital Asset with a 5-Year Estimated Useful Life

When a capital asset with a 5-year estimated useful life is sold during the second year,how would the use of the SYD method of amortization,instead of the straight-line method,affect the gain or loss on the sale? $$\begin{array} { | l | l | l | } \hline & \text { Gain } & \text { Loss } \\\hline 1 & \text { No effect } & \text { No effect } \\\hline 2 & \text { Increase } & \text { Increase } \\\hline 3 & \text { Decrease } & \text { Increase } \\\hline 4 & \text { Increase } & \text { Decrease } \\\hline\end{array}$$

A) Choice 1
B) Choice 2
C) Choice 3
D) Choice 4

Correct Answer:

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