Johnson Family Care Inc. is a large ambulatory care center that provides comprehensive 24-hourprimary and specialty care to a largesuburban population in Pennsylvania. The center recently purchasednew clinical laboratory equipment for $1.1 million and spent $22,000 to renovate a center room toaccommodate the new equipment. The useful life of the equipment is estimated to be ten years, after whichit canbe sold for $75,000. Johnson uses a straight-line method to calculate book depreciation and pays tax ata rate of 40 percent. Theequipment falls into the MACRS seven-year class.

Question: What annual depreciation expense will be reported on the income statement for the center?

Using the straight line deprecation calculation: Cost/Life i took the 1.1 million plus $22,000 and divided it by 10 years and got $112,200. However i'm not sure if i'm missing a piece in the information.