Cutter Enterprises purchased equipment for $72,000 on January 1, 2013. The equipment is expected to have a five-year life and a residual value of $3,900.

Using the straight-line method, depreciation for 2014 and the equipment's book value at December 31, 2014, would be:

	$13,620 and $40,860.
	$28,800 and $43,200.
	$13,620 and $44,760.
	$14,400 and $57,600.