· XYZ Company purchased a new piece of equipment for its manufacturing facility at the beginning of 2020. The equipment, with a purchase price of $50,000, has an estimated useful life of 5 years and a residual value of $5,000. Utilizing the straight-line depreciation method:

• Calculate the annual depreciation expense.
• Determine the book value of the equipment at the end of 2023.
• Evaluate the impact of depreciation expense on the company's income statement and balance sheet for the fiscal year 2023.