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On January 1, 2021, a company purchased new equipment for $40,000 by paying cash. Other...

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Accounting

On January 1, 2021, a company purchased new equipment for $40,000 by paying cash. Other costs associated with the equipment were: transportation costs of $1,000; sales tax paid of $4,000; and installation cost of $3,500. The useful life is expected to be 5 years with a residual value of $15,000. How much is the Annual Depreciation Expense for 2021?

A. $9,700

B. $5,000

C. None of these are correct.

D. $5,900

E. $6,700

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