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?

A. $10,700

B. $11,040

C. $11,980

D. $21,700

E. $22,080

Please select the correct letter choice.