3. Daytona Beach Company purchased a car for a salesman for $23,500 at the beginning of 2016. The car had an estimated life of 5 years, and an estimated residual value of $3,500. Daytona Beach used the straight-line depreciation method. At the beginning of 2017, Daytona Beach incurred $2,500 to replace the car's transmission. This resulted in a 2-year extension of the car's useful life, but no change in the residual value.

A.	What type of cost is the $2,500? Explain.
B.	Calculate the book value of the car at the end of 2016.
C.	Find the depreciation expense on the car for 2017.