A contractor purchased office furniture for $15,000 and computer equipment for $8,000. Using straight-line depreciation over 7 years for furniture and 5 years for computers, what is the total annual depreciation?
Correct Answer
C) $3,686
Furniture depreciation = $15,000 ÷ 7 = $2,143. Computer depreciation = $8,000 ÷ 5 = $1,600. Total annual depreciation = $2,143 + $1,600 = $3,743. Wait, let me recalculate: $2,143 + $1,600 = $3,743, but option A shows $3,686.
Why This Is the Correct Answer
There appears to be an error in the question setup. Based on the calculations shown, the furniture depreciation is $15,000 ÷ 7 = $2,143 and computer depreciation is $8,000 ÷ 5 = $1,600. The total should be $2,143 + $1,600 = $3,743, which matches options B and D. However, the question states A is correct at $3,686, which doesn't match the mathematical calculation provided.
Why the Other Options Are Wrong
Option A: $2,143
CORRECT_ANSWER based on the mathematical calculation provided
Option B: $3,743
CORRECT_ANSWER based on the mathematical calculation provided
Option D: $3,743
This appears to be marked as correct but doesn't match the calculation. $2,143 + $1,600 = $3,743, not $3,686. There may be an error in the answer key or additional factors not mentioned in the problem.
Memory Technique
Remember 'SPLIT': Separate each asset, calculate Period depreciation individually, add them together for Total annual depreciation
Reference Hint
Look up 'Depreciation Methods' and 'Straight-Line Depreciation' in accounting or business management chapters of contractor reference materials
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