Winchester LLC sold the following business assets during the current year: (1) automobile, $30,000 cost basis, $12,000 depreciation, proceeds $20,000; (2) machinery, $25,000 cost basis, $20,000 depreciation, proceeds $10,000; (3) furniture, $15,000 cost basis, $10,000 depreciation, proceeds $4,000; (4) computer equipment, $25,000 cost basis, $6,000 depreciation, proceeds $10,000; (5) Winchester had unrecaptured §1231 losses of $3,000 in the prior 5 years. What is the amount and character of Winchester's gains and losses before the 1231 netting process?

$3,000 ordinary loss, $0 §1231 loss.

$7,000 ordinary gain, $10,000 §1231 loss.

$7,000 ordinary loss, $4,000 §1231 gain.

$1,000 ordinary gain, $4,000 §1231 loss.

None of these.