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Altura plc Date: 31 December 2023Details:Inventories of raw material, steel:Cost£35,000Replacement cost£40,000Inventory of finished goods:MaterialAlphaBetaDirect costs£75,000£45,000Proportion of...

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Question

Accounting

Altura plc
 Date: 31 December 2023

Details:

  1. Inventories of raw material, steel:

Cost

£35,000

Replacement cost

£40,000

  1. Inventory of finished goods:

Material

Alpha

Beta

Direct costs

£75,000

£45,000

Proportion of fixed factory overhead

£20,000

£15,000

Proportion of selling costs

£5,000

£4,000

Net realizable value

£110,000

£70,000

  1. Plant and machinery:
    • An item of plant was purchased on 1 January 2022 for £200,000. It has a useful life of 10 years and a residual value of £10,000. The straight-line method of depreciation is used.
  2. Freehold property:
    • Acquired for £600,000, land element estimated at £100,000. The building has an expected life of 50 years.
  3. Research and development:
    • Research costs related to the development of a new product: £10,000.
    • Development costs incurred on a project: £15,000, expected to benefit over 5 years.

Required:
 Prepare the necessary adjustments to the financial statements of Altura plc for the year ended 31 December 2023.

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