Equipment costs $27,000, residual $900, three-year life, acquired 1 January 2012. Reducing balance at 2/3 gives $18,000 then $6,000 in years 1 and 2. What is the depreciation charge for year 3?

1. Carrying amount at start of year 3 $= \$27{,}000 - \$18{,}000 - \$6{,}000 = \$3{,}000$. 2. In the FINAL year the charge is the difference between carrying amount and residual value, not carrying amount × rate. 3. Year 3 charge $= \$3{,}000 - \$900 = \$2{,}100$. 4. Option A applies $3{,}000 \times 2/3 = \$2{,}000$, ignoring the final-year rule and depreciating below residual; B is the opening carrying amount. _Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §4.5.2 "Declining Balance Method", p.157_