On June 1, Scotter Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years or 30,000 hours. Using straight-line depreciation, compute depreciation expense for the first year, which ends on December 31. THE ANSWER IS NOT $30,000

a. $30,000

b. $17,500

c. $40,000

d. $12,500