New lithographic equipment, acquired at a cost of \(\$ 175,000\) at the beginning of a fiscal year, has an estimated useful life of five years and an estimated residual value of \(\$ 15,000\). The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On the basis of the data presented to the manager, the double-declining-balance method was selected.
In the first week of the fifth year, the equipment was traded in for similar equipment priced at \(\$ 240,000\). The trade-in allowance on the old equipment was \(\$ 25,000\), cash of \(\$ 15,000\) was paid, and a note payable was issued for the balance.objs. 4,5