On January 1, 2023, Chao Inc purchases a piece of equipment for $35,000 cash. They expect to use the equipment in operations to generate revenue for five years. Equipment has a salvage value of $3,000.

Using the straight line method, what is Chao's annual depreciation expense?

Prepare the depreciation schedule below, using the straight line method.

Depreciation Schedule

Year	Beginning Book Value	Depreciation Expense	Ending Book Value
1
2
3
4
5