Beale Company purchased a machine on 1 January 19X9, at an invoice price of £142,600. Transportation charges amounted to £2,000, and £3,400 was spent to install the machine. Costs of removing an old machine to make room for the new one amounted to £1,200, and £200 was received for the scrap value of the old machine.

Required:

(a) State the amounts of depreciation which would be provided on the machine for the first year on a straight-line basis and on a decreasing-balance basis, assuming an estimated life of eight years and no salvage value expected at the end of that time.

(b) Compute the depreciation provision for the year ended 31 December 20X1, assuming a revised total life expectancy for the machine of 12 years; assume that depreciation has been recorded through 31 December 20X0 on a straight-line basis.