Machinery was purchased on January 1 for $51,000. The machinery has an estimated life of 7 years and an estimated salvage value of $9,000. Double-declining-balance depreciation for the second year would be (round calculations to the nearest dollar):
A) $10,929
B) $6,000
C) $10,500
D) $10,408

Question

Quizplus · Accepted Answer

Double declining balance rate = (1 / 7) × 2 = 28.5714%. First year depreciation = $51,000 × 28.5714% = $14,571
Second-year depreciation = ($51,000 - $14,571) × 28.57% = $10,408

Machinery Was Purchased on January 1 for $51,000