On May 19, 2020, Sinnott Corporation purchased two pieces of used equipment for $600,000. Sinnott had been trying to acquire both pieces of equipment for some time. The seller had advertised the processing equipment for $337,200 and the packaging equipment for $286,800. Sinnott was able to negotiate a package deal from the seller for buying both pieces. Immediately after the purchase, Sinnott had the equipment appraised so it could increase its insurance coverage. The appraisal indicated that the fair value of the processing equipment was $331,992, while the packaging equipment had a fair value of $282,808. Sinnott paid $22,500 in transportation costs to get both pieces of equipment to the company's manufacturing facility. Sinnott also paid $5,500 for installation charges for the processing equipment and $1,700 in installation charges for the packaging equipment. All of the installation work was completed on May 28, 2020, and Sinnott began to use the equipment. Sinnott's management expects that the processing equipment will have a useful life of six years and a residual value of $38,530. The packaging equipment is expected to have a useful life of five years and a residual value of $17,450 at that time. Sinnott uses the straight-line method for depreciating its equipment.