Question: Saturn Co . purchases a used machine for $ 1 1 0 , 0 0 0 cash on January 2 . The company predicts the

Saturn Co. purchases a used machine for $110,000 cash on January 2. The company predicts the machine will be used for five years and have a $10,000 salvage value. The depreciation method used by Saturn Co. is straight-line. On December 31, at the end of its fourth year in operation the machine was sold for $25,000. What was the effect of this sale?

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