LYO Community Pharmacy purchased a delivery van having the following characteristics:

Cost	$32,000
Estimated useful life (years)	5
Residual value	$4,000
Estimated miles of use during useful life	200,000
Miles of use during year 1	54,000

Assume the pharmacy uses the units-of-activity method of depreciation. Compute depreciation expense for year 1.

		$28,000
		$103,704
		$7,560
		$8,640