78 Equipment was purchased for $25 00 . Freight charges amounted to $700 and there was a cost of $3 000 for building a foundation and installing the equipment . It is estimated that the equipment will have a $1 600residual value at the end of its 5 - year useful life . Using the straight - line method , annual depreciation expense will be ( 2 ) $4 540 ( 6 ) $4 , 680 ( C ) $5 420 ( 1) $5 740