A machine acquired for £480,000 on 1 January 2006 and depreciated using the straight-line method, assuming 20 years’ life and 10% scrap value, was damaged in an accident on 1 January 2012. Though it was restored to working order at a cost of £20,000, it is expected to be operational for four years more and the present value of the income it is expected to generate is only £84,000. The machine, being of a specialised nature, cannot be sold for more than £10,000. What is the amount to be written off as impairment as at 1 January 2012 and as depreciation for the year ended 31 December 2012?

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Impairment Depreciation £21,000 £23,500 £21,000 £23,500 a £266,400 b £256,499 c £286,400 C d £266,400