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. $10,929B. $10,408C. $10,500D. $6,000

Option (B) is correct.

Explanation:

Given that,

Purchasing cost = $51,000

Estimated life of machinery = 7 years

Estimated salvage value = $9,000

Depreciation rate under Double declining balance method:

= (1 : Useful life) * 200%

= (1 : 7) * 200%

= 28.57%

First year depreciation = Purchasing cost * Depreciation rate

= $51,000 * 28.57%

= $14,571

Second Year depreciation:

= (Purchasing cost - First year depreciation) * Depreciation rate

= ($51,000 - $14,571) * 28.57%

= $10,408