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 three years or 30,000 hours. Using straight-line depreciation, calculate depreciation expense for the first year, which ends on December 31.

a. $40,000

b. $12,500

c. $17,500

d. $30,000