Computing Units-of-Production Depreciation On January 1, 2020, equipment is purchased for $120,000 that has an estimated residual value of $800 and an estimated useful life of 10 years. The equipment is expected to produce 40,000 units of output over its useful life. The equipment produced 4,400 units in its first year. Determine depreciation expense for 2020, using units-of-production depreciation method