Alpha Ltd Date: 31 May 2024Details:Raw materials inventory (cotton):Cost: £40,000Replacement cost: £38,000Finished goods inventory:ProductPhiChiDirect costs£80,000£65,000Proportion of...
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Accounting
Alpha Ltd
Date: 31 May 2024
Details:
- Raw materials inventory (cotton):
- Cost: £40,000
- Replacement cost: £38,000
- Finished goods inventory:
Product | Phi | Chi |
Direct costs | £80,000 | £65,000 |
Proportion of fixed overhead | £20,000 | £15,000 |
Proportion of selling costs | £5,000 | £4,000 |
Net realizable value | £120,000 | £90,000 |
- Machinery:
Acquired on 1 June 2020 for £300,000, depreciated over 8 years using the reducing balance method. - Freehold property:
Acquired 19 years ago for £2,200,000, land value estimated at £550,000. Buildings are depreciated over 55 years. - Research and development:
- Research costs: £125,000
- Development costs: £160,000, benefiting over 6 years.
Required:
Explain how these items should be presented in Alpha Ltd's financial statements for the year ending 31 May 2024.
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