Reference no: EM132338404

Question : Blue, Inc. incurred the following costs related to equipment purchased on January 1, 2015:

· Purchased equipment for $50,000, terms 2/10, net 30. Paid for the equipment on January 5, 2015.

· Had the equipment installed and paid the installer $3,000.

· Paid the freight bill for the truck that delivered the equipment for $500.

· Advertised a new product that will be produced by the new equipment, $1,200.

· Sales taxes paid on the equipment amounted to $4,000.

· Blue believes the machine will be useful for 5 years, at which time it will be sold for $3,000.

Assuming Blue, Inc. uses the straight-line method of depreciation, what will depreciation expense on its 2016 income statement be?