Use the following information to answer the given question, \(\begin{array}{c|c} & N\\ \hline \text{Purchase price of equipment} & 60,000\\ \text{Freight an...

The straight-line method of depreciation assumes that the asset loses an equal amount of value each year over its useful life. To calculate the annual depreciation charge, we need to subtract the estimated scrap value of the equipment from its initial cost and then divide the result by the estimated useful life: Annual Depreciation Charge = (Purchase price + Freight and installation cost - Estimated scrap value) ÷ Estimated useful life Substituting the given values, we have: Annual Depreciation Charge = (60,000 + 10,000 - 2,000) ÷ 5 = 68,000 ÷ 5 = N13,600 Therefore, the annual depreciation charge of the straight-line method is N13,600, which is closest to option (B) N13,000.